Benefits of going limited

cruiser202006

Plumbing and heating contractor, currently a sole trader with no employees. Looking for pros and cons of going limited. Possibly have a contract for a good few houses so would like to get sorted beforehand if it would be more beneficial to me

Glass fused light

cruiser202006 wrote: »

Plumbing and heating contractor, currently a sole trader with no employees. Looking for pros and cons of going limited. Possibly have a contract for a good few houses so would like to get sorted beforehand if it would be more beneficial to me

limited liability in the building trade would be a big one.

The company is itself an asset and if it has a good reputation (good will) could be sold at a later date, but this is mostly depending on the scale of the end company.

Some government contracts prefer to deal with companies.

Credit from banks etc would likely still involve a personal guarantee, (<this will\can remain in place after you leave the company) and the move with suppliers may result in a reassessment of credit risk of you v the company.

The disadvantage would be that you need an addition director and need to understand and comply with the rules of being a director. Remember in principle it's not your money but someone else's money who you manage it for.

There is a cost and need to file company accounts, you will swap to being a director but still need to file a tax return.

An advantage would be the ability pay more into a pension pot.

TitianGerm

Glass fused light wrote: »

limited liability in the building trade would be a big one.

The company is itself an asset and if it has a good reputation (good will) could be sold at a later date, but this is mostly depending on the scale of the end company.

Some government contracts prefer to deal with companies.

Credit from banks etc would likely still involve a personal guarantee, (<this will\can remain in place after you leave the company) and the move with suppliers may result in a reassessment of credit risk of you v the company.

The disadvantage would be that you need an addition director and need to understand and comply with the rules of being a director. Remember in principle it's not your money but someone else's money who you manage it for.

There is a cost and need to file company accounts, you will swap to being a director but still need to file a tax return.

An advantage would be the ability pay more into a pension pot.

You can have a one director company now, you do need a company secretary as well though.

Glass fused light

TitianGerm wrote: »

You can have a one director company now, you do need a company secretary as well though.

Cheers, that makes for a short board meeting.