Sold trader vs limited company near retirement

FlyingMonkeys

I’m looking for some advice about becoming a limited company. My dad is a long term sole trader, employing a number of people. He’s always loved his job, but is now well past retirement age and still working full time. He would like to retire, but it’s not going to be immediate. After a health scare, we’ve been looking into whether the business should be a limited company. If we don’t do that, my understanding is that the day he can’t work, the business can’t trade and any debts etc incurred in winding up would be paid for from his estate (ie his and my mums house). If the business is ltd, then it can continue trading even if he can’t work. These aren’t rich people looking for a dodge, they’re just trying to make sure they still have a roof over their heads if my dad got sick and safeguard the jobs of the people they work with. Has anyone had experience of this, and if that’s the right way to go? If it is how do we even go about it?

pramsay13

How can your dad employ people if he is a sole trader? 
It's possible to open a limited company and that might make sense given the current setup, but there is also nothing wrong with things remaining as they are.
I assume your dad is called FlyingMonkeysSr trading as FMPlumbing or whatever, so you or the other workers could continue to trade as FMPlumbing.

FlyingMonkeys

Thanks for replying. You can employ people as a sole trader, it just means one person is ultimately responsible for / in control of that business

Phoenix72

One for the accountants I think. Transferring business assets and goodwill from the sole trading to incorporated is not something to DIY.

pramsay13

FlyingMonkeys said:

Thanks for replying. You can employ people as a sole trader, it just means one person is ultimately responsible for / in control of that business

So what company are they employees of?
It sounds as though they are also self employed and your dad is paying them to do work. 

Phoenix72

pramsay13 said:

FlyingMonkeys said:

Thanks for replying. You can employ people as a sole trader, it just means one person is ultimately responsible for / in control of that business

So what company are they employees of?
It sounds as though they are also self employed and your dad is paying them to do work. 

Why do you think it needs to be a company? And what has op said that leads you to the conclusion the people he employs are self-employed?

DullGreyGuy

pramsay13 said:

FlyingMonkeys said:

Thanks for replying. You can employ people as a sole trader, it just means one person is ultimately responsible for / in control of that business

So what company are they employees of?
It sounds as though they are also self employed and your dad is paying them to do work. 

There employees of the OPs father... its not just companies that can employe people. Sole traders, Partnerships etc all can have employees too

Most Home Insurance includes Employers Liability as standard in case you hire a cleaner or nanny or au pair and most families dont incorporate a company to raise their kid when they decide to hire an au pair

Tucosalamanca

Yes a limited company is probably the way to go. For limited liability if nothing else.
If your Father is past retirement age and has had a health scare, it would be well worth spending a few hours with a chartered accountant. Not only to form the limited company but to discuss ownership, succession, exit options and possibly tax, pensions and inheritance planning.

As an aside, it's not at all unusual for a sole trader to have staff. I was employing a number of staff on paye before I became a limited company. It's simply a case of 'trading as xyz' and referring to yourself as 'the owner' rather than company director or similar.