Bank Account Question

jmds · Jan 23, 2006

Hi,

I have just setup a limited company with the same name as my sole trading business(apart from the ltd bit on the end).

Thanks to http://www.quickformations.co.uk this was the painless bit.

Is there any reason why I should not continue to use the same business bank account that I already have setup?

bwglaw · Jan 23, 2006

Changing from sole-trader to a Ltd Company is effectively changing the legal entity. The Ltd Company is now a legal entity in its own right and should have its own bank account.

jmds · Jan 23, 2006

Thanks for that, I should have added that I plan to wind down the sole trader business, does this make any difference?

bwglaw · Jan 23, 2006

jmds said:
Thanks for that, I should have added that I plan to wind down the sole trader business, does this make any difference?

You cannot 'wind down' a sole trading business but you can 'cease trading' and sell/transfer any assets.

However, not sure why you are attempting to 'wind down' the sole trading business. You can just 'transfer' the assets to the Ltd Company unless you have a specific reason for not doing so. If you were JMDS t/as Joe Bloggs and have become incoprorated to Joe Bloggs Ltd then a transfer of assets can be done.

Even if you do cease trading as a sole trader, any debts remain your liability but when you incorporate i.e. become Ltd, the debts are normally deemed as transferred and becomes the debt of the Ltd Co. This depends on the facts and circumstances of every business.

You do need to speak to an accountant, if you do not have one, we do. We would also be able to look into any legal issues. We can be contacted at [email protected]

Trust this helps

Joyous · Jan 23, 2006

jmds said:
Thanks for that, I should have added that I plan to wind down the sole trader business, does this make any difference?

It makes no difference. The limited company should still have its own bank account.

Regards

Joy

jmds · Jan 23, 2006

Many thanks for the replies.

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