(very) small business bank account

nmn

If you do go down the Ltd Company route (your other thread) then you MUST open a business bank account,

Can anyone direct me to the relevant legislation that requires (either in CAPSLOCK or not) a trading limited company to have a bank account of their own?



This is not the case -- if a director thought it best they could run a cash account for the co. with a detailed ledger if they really wanted. In addition to any MTD requirements (which don't include having a bank account - yet).


The issues with using a personal account include things like: you may accidentally end up looking like the co. is loaning the director money and/or personally earning interest on the money. Neither of those are illegal (in themselves), but require proper accounting - which will become an increasingly frustrating exercise.

CityLite

nmn wrote: »

Can anyone direct me to the relevant legislation that requires (either in CAPSLOCK or not) a trading limited company to have a bank account of their own?



This is not the case -- if a director thought it best they could run a cash account for the co. with a detailed ledger if they really wanted. In addition to any MTD requirements (which don't include having a bank account - yet).


The issues with using a personal account include things like: you may accidentally end up looking like the co. is loaning the director money and/or personally earning interest on the money. Neither of those are illegal (in themselves), but require proper accounting - which will become an increasingly frustrating exercise.

There is no legislation as such.

But can you point us in the direction of any bank that will open the account in the name of a limited company.

Or even a bank that does not prohibit the use of a personal account for business purposes :cool:

00ec25

J_B wrote: »

Yes, certainly - why do you think otherwise

You don't know where the company borrowed it's money from in the first place, do you.
Maybe it has to pay it back ....

See above!

Your comment does not apply to any income received from trading activity. A company that does nothing other than have a debt and repay the debt is rather pointless starting in the first place

J_B

00ec25 wrote: »

Your comment does not apply to any income received from trading activity. A company that does nothing other than have a debt and repay the debt is rather pointless starting in the first place

Sorry - you're losing me here


We set up the Ltd Co in 2016 - the first thing it did was to buy a property for 150K. We leant it the money to do this. The next thing it did was to turn this house into three apartments - we leant it the money to do this.
We are now trading and are able to recoup some of these earnings by the company repaying some of the directors loan accounts.


What's the problem?

00ec25

J_B wrote: »

What's the problem?

what point you are trying to make

the company had cash in the bank which it spent buying the property

the company now gets trading income which belongs to the company, not to you

you choose to ask the company to repay the debt it owes you. That does not alter the fact the cash is company cash and belongs in an account in the name of the company. It is not your cash (debt repayment) until the company transfers the cash to you.

this thread is about a company and how it holds cash in the bank

J_B

00ec25 wrote: »

this thread is about a company and how it holds cash in the bank

This thread was about 'what business bank account should I take out', but it seems to have drifted off topic somewhat.


My initial post (#4) was giving my experiences, but .....

Mistral001

J_B wrote: »

This thread was about 'what business bank account should I take out', but it seems to have drifted off topic somewhat.


My initial post (#4) was giving my experiences, but .....

Agree totally

The thread is about a small business account. That can mean an account for a sole trader business with only one person in it, a sole trader with a couple of employees, a partnership, Ltd company, an unlimited company etc. etc.

You shared with us your experience of when you were a sole trader and as someone who formed a Ltd company. It is useful to hear that in my opinion.