At what stage should I register as a private limited company?

[Kerwin]

I want to register as a private limited company so that I can get a dedicated debit card and better account statements, but I'm not sure if I would be rushing into things if I registered now. I can keep track of my expenses, but it would all be mixed in with my banking, on the other hand, I doubt I'll be ready to go to market for at least six months which makes me feel that I might be registering too early. On the other hand, I am incurring expenses.

 

[fisicx]

You don’t need to be a limited company to open a business bank account.

 

[Kerwin]

You don’t need to be a limited company to open a business bank account.

True. But I want the business to be a private limited company so I can keep my finances completely separate from my finances. Plus there is a chance I might need a business loan. I'm aware of the fact that I'll probably still need to offer a personal guarantee, but it just makes things easier. Plus I'd like to be able to sell shares in the company if my plans come to fruition.

 

[Mr D]

True. But I want the business to be a private limited company so I can keep my finances completely separate from my finances. Plus there is a chance I might need a business loan. I'm aware of the fact that I'll probably still need to offer a personal guarantee, but it just makes things easier. Plus I'd like to be able to sell shares in the company if my plans come to fruition.

For that you want a separate bank account.
Much cheaper than a limited company.

However if at some point you do want a limited company - not so easy to sell shares. Its not like selling shares in Lloyds bank.
For starters the market for shares in a limited company can be very small.

 

[Graham Tyers]

It sounds like you have decided that a limited company is your preferred option so just do it. Your reasons are sound.

I prefer it as well, it gives me the proper "separation of church and state" between my personal affairs and the businesses.

It gives a business a unique self identity and I like that, and as it grows you can let the key staff have a share and a stake in the business in a tidy and simple way.

It also feels more grown up and professional to be a limited company rather than Joe Bloggs trading as XYZ

You won't have to file accounts for nearly 2 years so plenty of time to see how it goes. If you aren't flying by then just file it as non-trading and close it. Total cost £35 something.

 

[fisicx]

True. But I want the business to be a private limited company so I can keep my finances completely separate from my finances. Plus there is a chance I might need a business loan.

You can do all this as a sole trader. You don’t need to set up a limited company. If the business succeeds you can always do it later.

 

[Mark T Jones]

The only valid reason you have given for going limited is selling shares, but since this is some way off and setting up a limited company tAkes about 20 minutes, I really wouldn’t bother.

Unless there is a separate reason you are almost certainly over complicating matters

 

[paulears]

It's also quite tricky getting finance for a new ltd company unless you personally guarantee it, which rather spoils the protection a limited Liability Company provides?

 

[Kerwin]

Fair enough. You have persuaded me. I'll stay as a sole trader.

My next question would be what is the best business bank account available at the moment for a new business?

 

[Mr D]

Fair enough. You have persuaded me. I'll stay as a sole trader.

My next question would be what is the best business bank account available at the moment for a new business?

The best business account?
One that meets your requirements.

What I use suits my requirements, it may not be local for you or suit your requirements.

I use Santander - free banking for first 12 months (as is common for new customers at many banks) and £7.50 thereafter per month.
I don't normally need to get cash out or bank cash.

 

[Kerwin]

The best business account?
One that meets your requirements.

What I use suits my requirements, it may not be local for you or suit your requirements.

I use Santander - free banking for first 12 months (as is common for new customers at many banks) and £7.50 thereafter per month.
I don't normally need to get cash out or bank cash.

Basically what I am after is a debit card, an easy to use Android app, decent bank statements at the end of the month (preferably in Excel format but failing that PDF) and the chance to get a startup loan if required. Oh and the ability to switch to a limited company down the track if required.

 

[Kerwin]

Oh and English support representatives. I'm fed up with not being able to understand people on the phone.

 

[Socio South West]

Oh and English support representatives. I'm fed up with not being able to understand people on the phone.

If that is an over-riding criterion, I suggest you look at the Britline accounts with Credit Agricole, the French bank: By far the best customer service and most English customer service representatives I have experienced in recent years - sadly the account will have to be in Euros.

Santander gets a +1 from the pick of the English banks from me: Well integrated with mobile apps, card with the account, £7.50/month. Can't speak for customer service as I have never needed them, but I dealt with a couple of estates recently, and got the most pro-active and useful assistance in branch from Santander.

 

[Mr D]

Oh and English support representatives. I'm fed up with not being able to understand people on the phone.

Yes the English are not ideal.
Had to ring Birmingham council once for a client, the guy with the Dudley accent was almost able to provide the required information verbally.

 

[Mark T Jones]

Basically what I am after is a debit card, an easy to use Android app, decent bank statements at the end of the month (preferably in Excel format but failing that PDF) and the chance to get a startup loan if required. Oh and the ability to switch to a limited company down the track if required.

It’s reasonably unlikely that a bank will give you a loan without hard security

On the other hand, Start Up Loans exists for this purpose

 

[fisicx]

Oh and the ability to switch to a limited company down the track if required.

Makes no difference to the bank. You can switch to limited without affecting your business bank account.

 

[Scalloway]

You can switch to limited without affecting your business bank account.

The bank account needs to be in the name of the limited company otherwise there may be tax consequences for the director.

 

[fisicx]

When I went limited the bank sorted everything for me.