Self Employed or Limited Company?

Strikeman

nmn wrote: »

If you're renting from a landlord, this is important. If your business falls onto hard times, and/or the business runs up rent arrears (as it might if your client base dries up for whatever reason or initially rent more space than you immediately need); you create a corporate veil when trading as a limited company. That means any debt the company has shouldn't end up being demanded from you personally. The worst than happens is the company folds - your own savings, family, house and assets are all safe.


So not only is it almost always still tax efficient for profitable businesses (if only for the xmas party allowance initially, but if you aim to grow the bus. it will absolutely be worthwhile when/if successful), but also highly beneficial if your business doesn't do so well.

Landlord and rent wise, she is lucky in that she is able to request the room by the hour on an ad-hoc basis with no minimum obligations we are currently aware of. The room is essentially in a building that charges all rooms ad-hoc, with the rooms being booked a week before in order to secure

Strikeman

Manxman_in_exile wrote: »

nmn wrote: »

The final point by the above poster - that limited is short for limited liability, and somehow that will put customers off - seems fairly spurious, I'm not exactly sure what evidence they have for such opinion.
QUOTE]


As a former NHS manager in a mental health trust it would put me off...


There are many different types of "qualified counsellor". Will your partner's professional body allow them to practise as a limited company in the first place?

She is qualified via the BACP and has undertaken over 250 hours of obligatory counselling as part of her qualification, working predominantly with young adults. She has also moved into a volunteer role within the sexual assault counselling area as well


I am unaware of whether the BACP will object to a Ltd Company being formed to practice so we will investigate this

00ec25

nmn wrote: »

Plus, you can legitimately have an annual booze up completely tax free spending up to £100/head (that is for all attendees - they don't even all have to be employees/shareholders/directors)!

that is an inaccurate statement

nmn wrote: »

That means any debt the company has shouldn't end up being demanded from you personally. The worst than happens is the company folds - your own savings, family, house and assets are all safe..

just because the company is Ltd does not automatically mean the director is personally unliable in any circumstance. Banks are a little less willing to lend to new start ups without obtaining director guarantees nowadays

Pennywise

nmn wrote: »

If you're renting from a landlord, this is important. If your business falls onto hard times, and/or the business runs up rent arrears (as it might if your client base dries up for whatever reason or initially rent more space than you immediately need); you create a corporate veil when trading as a limited company. That means any debt the company has shouldn't end up being demanded from you personally. The worst than happens is the company folds - your own savings, family, house and assets are all safe.

Lots of landlords want personal guarantees or indemnities from the directors of limited companies as they're wise to the risk of limited companies going bust and reneging on their lease obligations.

Likewise with loans and leases - lenders also usually want personal guarantees from directors for the same reasons. Even some suppliers insist of director guarantees from limited companies wanting credit terms.

nmn

00ec25 wrote: »

that is an inaccurate statement

just because the company is Ltd does not automatically mean the director is personally unliable in any circumstance. Banks are a little less willing to lend to new start ups without obtaining director guarantees nowadays

1. You're right - it's £150-per-head - but otherwise it's basically correct (subject to rules on gov.uk/expenses-benefits-social-functions-parties/whats-exempt)


2. Yes - but taking a loan with PG isn't what's being discussed. This thread seems to be going on a tangent about limited liability under this case or that case - it is only one of several advantages to trading a limited company rather than an individual. The bottom line is, you can still be more tax efficient through a company than you can an individual.

Mistral001

Strikeman wrote: »

Manxman_in_exile wrote: »

I am unaware of whether the BACP will object to a Ltd Company being formed to practice so we will investigate this

Some professional bodies will prohibit members trading using a Ltd company. Most will allow it though, but if the member uses the Ltd company to avoid their responsibilities to their clients i.e. to simply go bust when faced with a claim they cannot pay, it is a disciplinary matter and they can be expelled. In practice the member will be sensible enough to take out professional indemnity insurance which will cover them for the eventuality of a claim against them and it is thus irrelevant whether they operate as a partnership, sole trader or using a Ltd Company with regard to being able to pay a claim.