Nailing The Transition From Sole Trader To Limited Company

Monday, August 14, 2017


If you’ve been a freelancer or sole trader for a while now, you might be considering how to make your business more official. Most sole traders eventually choose to register their business as a limited liability company. This reduces their personal liability should things go wrong. This makes perfect sense, especially if you are a contractor. Of course, nothing comes easy, and life as a company director can be quite different to what you’re used to.

Forms
It all starts with a fairly lengthy form to register your business. You will need a company secretary as well so find a friend or partner you’re willing to work with here. Your personal address and details will be publicly available on the Companies House database. This is used to perform checks on the legality and structure of your business by other companies you might want to work with in the future. It can be checked by anyone in the world at any time.

Director
Now you are formally a company director, you need to start detailing your accounts far more than before. For a start, you need to allocate your pay rather than just dipping into the money you made. Some of that income should be put aside for your company investments. All of this means you need a new bank account for the company. Every penny might now be scrutinised so make sure you can account for each transaction.

Accounting
Once you have the account up and running, you will need a formal accountancy service. Chances are you might be better of with a full service that includes your insurances as the qdos contractor website provides. This means you have less to do and less to worry about ongoing. Accounts must be formally posted whereas you might have just informed HMRC about your bottom line figures before. 

Brand
Now you’re up and running as a formal company, you might want to consider a rebrand. Forming a company gives you the chance to completely start again. You don’t have to use any trading style that came before. Just be sure to include your experience in your marketing like your website. Develop fresh logos and branding to give your new company the boost it needs.

VAT
As a registered company, you’ve probably registered for VAT. Make sure your new livery includes all of these details. It should state your business address and your registered company number. Put these on your website home page, and formal business stationery. If you are using suppliers or operate a B2B sales model, you will need to pass these things along. They can be used as part of any credit checks performed.

Should you launch again? Yes, this makes sense. You need to assure your current suppliers that it’s still you at the steering wheel. And you need to let future customers know that your company is respectable and experienced when it comes to managing their needs. Use a press release, and send it out to relevant trade magazines and journals. Good luck with your new venture.

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