Limited Company Or Not

[JJL]

I’ve run businesses for over 20 years. Recently voluntarily dissolved a limited company.

I wanting to start again working part time, semi retirement. I’ll be selling stock online via eBay / Amazon, only selling within the UK, selling products sourced from reputable UK distributors.

I estimate turnover to be around 70k. I don’t get into debt as I pay in advance for stock and shipping.

Is it worth setting up a limited company again or should I stay as a sole trader?

Thanks

 

[Ozzy]

Hi and welcome,
On the basis of the above and how you describe your vision/expectations for the future it sounds like a Limited Company may be unnecessary, but you are expecting to exceed the VAT threshold - so you may not wish to personally be VAT registered which itself does then possibly bring a Limited Company back into the mix.

Do the products you are planning on selling expose you to any risk? (are they childrens toys, machinery, for example)

Basically, if you may be exposed to risk then consider the Limited Company.

 

[JJL]

Hi Ozzy,

Thanks for the response. I’ll be selling computer accessories such as usb hubs, headsets cables. But I’ll only source from reputable UK suppliers and I’ll have liability insurance. I’m thinking if there were an issue the UK distributor would be responsible.

Thanks

 

[Ozzy]

I’m thinking if there were an issue the UK distributor would be responsible.

No I'm afraid not. The contract is between you and the buyer, so you will be the first legally responsible point of call if something goes wrong. Worth keeping that in mind.
You can try and bump it up the supply chain, and sometimes that can work, but ultimately the contract is between you and your customers.

 

[JJL]

Thanks Ozzy, wouldn’t the insurance protect me if someone brought a claim? I totally get what your saying and it’s the reason for me asking the question, I just thought I’d be covered as I have insurance and solicitors are more likely to go after the bigger fish like the UK distributer who are also the brand owner.

 

[Kitsunae]

Hi Ozzy,

Thanks for the response. I’ll be selling computer accessories such as usb hubs, headsets cables. But I’ll only source from reputable UK suppliers and I’ll have liability insurance. I’m thinking if there were an issue the UK distributor would be responsible.

Thanks

Even if you have insurance, there is nothing like peace of mind that your house is never going to be at risk from an unexpected issue that burns down a purchaser's house.

The cost of a limited company is so low in the UK that I wouldn't hesitate.

 

[JJL]

Even if you have insurance, there is nothing like peace of mind that your house is never going to be at risk from an unexpected issue that burns down a purchaser's house.

The cost of a limited company is so low in the UK that I wouldn't hesitate.

Yeah, I see the point. I just wanted to avoid all the costs like payroll and accounts for Companies House.

 

[DontAsk]

Yeah, I see the point. I just wanted to avoid all the costs like payroll and accounts for Companies House.

Payroll doesn't have to cost you anything, especially if it's just you. HMRCs basic payroll software will be fine.

I would expect well under £1k/yr for accounts.

 

[MyAccountantOnline]

I’ve run businesses for over 20 years. Recently voluntarily dissolved a limited company.

I wanting to start again working part time, semi retirement. I’ll be selling stock online via eBay / Amazon, only selling within the UK, selling products sourced from reputable UK distributors.

I estimate turnover to be around 70k. I don’t get into debt as I pay in advance for stock and shipping.

Is it worth setting up a limited company again or should I stay as a sole trader?

Thanks

To ascertain whether it's worth while in terms of tax and accounting costs you'd need to look at your total personal income and predicted profit (not turnover) from the business.