Ltd Bank account as sole trader

[Jimwatson]

Hi hope someone can advise. I registered my start up business as Ltd with Companies House a few weeks ago; I did this to protect the name and was advised to send in dormant accounts at the end of the year, however I wish to trade for the time being in the same name (minus the LTD) as a sole trader. I had an interview this morning with HSBC for a start up account and he told me that because my company is registered as Ltd then my account name will have to end in LTD, for example "Joe Bloggs Holdings LTD", instead of "Joe Bloggs Holdings".

So my question is, if I open and a bank account, say Joe Bloggs Holdings LTD, can I still operate as a sole trader ?

Thanks

 

[Ally Maxwell]

The people on this forum make me mourn the death of common sense sometimes.

You are starting a company called 'Joe Bloggs Holdings" so open a bank account in that name.

I'm willing to bet you went into some meaningless spiel about registering a company when you spoke to HSBC. Why ?

You are going to operate as a sole trader, so open a sole trader account. Any company you may or may not have formed is irrelevant to the discussion.

 

[Jimwatson]

Ally, I went into the branch this morning with the intention of setting up a sole trader account; when I showe him my ID, including a letter from companies house, he said "oh your a LTD company, therefore you have to have a LTD account". I tried to explain that I will send in dormant accounts for the the company next year and that I only registered with companies house to protect the name. He would have none of it and said I Have to open the account as LTD. Im not sure if he is correct

 

[japancool]

Ally, I went into the branch this morning with the intention of setting up a sole trader account; when I showe him my ID, including a letter from companies house, he said "oh your a LTD company, therefore you have to have a LTD account". I tried to explain that I will send in dormant accounts for the the company next year and that I only registered with companies house to protect the name. He would have none of it and said I Have to open the account as LTD. Im not sure if he is correct

No no no no. Open a sole trader account. This is completely separate and has nothing to do with your limited company. Don't even bring up the limited company. Your are not opening the account for your limited account, you are opening for yourself as a sole trader.

But what you cannot do is use your sole trader account for your limited company. You will need a different, separate bank account for that.

 

[Ally Maxwell]

Why did you show your letter from companies house to open a sole trader account ??

 

[japancool]

And unless your company name is a key part of your marketing and product strategy, there was really no need to register it. It gives you limited (no pun intended) protection as far as names goes.

 

[Jimwatson]

It was a mistake on my part that I showed the bank the LTD letter, it was in my folder with all my other ID. However he flatly said that I cannot open a sole trader account, because I have registered the company as LTD.Im in a pickle now, Can I still trade as a sole trader even though I have registered (a company with the same name and address) LTD. I thought this was acceptable.as long as I send in dormant accounts for the LTD each year.
Has the bank got it wrong then ?

 

[Jimwatson]

I registered LTD for name protection, its a good name and I dont want others to use it; I know sole traders have some protection with names but going LTD offers a better level of protection. Should I approach the bank and make a case that as a sole trader and LTD are two seperate entity's that I am within rights to open a sole trader account (even if the two have the same name, except for the LTD, and address) ??

 

[japancool]

I registered LTD for name protection, its a good name and I dont want others to use it; I know sole traders have some protection with names but going LTD offers a better level of protection. Should I approach the bank and make a case that as a sole trader and LTD are two seperate entity's that I am within rights to open a sole trader account (even if the two have the same name, except for the LTD, and address) ??

Go to a different bank.

Going limited doesn't offer a better level of protection. All it does is it stops another company registering with the same company name as yours.
http://smallbusiness.co.uk/does-registering-my-company-name-give-me-trade-mark-protection-1652553/

It doesn't stop someone else using it as a trading name, unless you own it as a trademark or can prove that they are passing off, which you will find it difficult to do if you're not using it actively.

 

[japancool]

It was a mistake on my part that I showed the bank the LTD letter, it was in my folder with all my other ID. However he flatly said that I cannot open a sole trader account, because I have registered the company as LTD.Im in a pickle now, Can I still trade as a sole trader even though I have registered (a company with the same name and address) LTD. I thought this was acceptable.as long as I send in dormant accounts for the LTD each year.
Has the bank got it wrong then ?

He thinks you're trying to open a sole trader account to use for your limited company, that's why he's refusing.

 

[japancool]

And yes, you can trade as a sole trader. So long as the activities and accounts of the sole tradership and limited company are kept separate.

 

[Jimwatson]

Okay thanks, I dont want anyone starting up a LTD company with the same name, thats why I registered it in the first place but thats not my issue really.

Would I be able to use the Joe Bloggs Holdings LTD bank account, as a sole trader. If I can do that there will be no need to change banks.

 

[Ally Maxwell]

No

 

[japancool]

Okay thanks, I dont want anyone starting up a LTD company with the same name, thats why I registered it in the first place but thats not my issue really.

Well, so long as you understand that it doesn't stop anyone else from trading as Joe Bloggs, that's fine.

Would I be able to use the Joe Bloggs Holdings LTD bank account, as a sole trader. If I can do that there will be no need to change banks.

No. Read what I said about keeping the activities and accounts of the two entites separate. The bank account does not belong to you, it belongs to the company.

 

[Jimwatson]

Have the bank got this wrong then, they will not allow me to open a sole trader account. If the LTD company remains a separate entity (even thou it has the same name except for the LTD), then surely it should not make any difference to them.

 

[Ally Maxwell]

As someone said above, several posts ago, go to a different bank. Save yourself a lot of hassle (wit this and everything else you do in life) by sticking to the relevant facts.

 

[japancool]

Have the bank got this wrong then, they will not allow me to open a sole trader account. If the LTD company remains a separate entity (even thou it has the same name except for the LTD), then surely it should not make any difference to them.

The bank hasn't got it wrong. They simply don't believe you when you say you're going to keep the two separate.

 

[Jimwatson]

Okay thanks for all the response guys, most helpfull; looks like I will have to open another account at a different bank.

 

[scdirect]

Question : Why registered a ltd company name to then set up a sole trade bank account with the SAME name???

 

[Deleted member 59730]

I registered LTD for name protection, its a good name and I dont want others to use it; I know sole traders have some protection with names but going LTD offers a better level of protection.

To protect a name you should use a Trademark registration. A Company has no protection for a name.

 

[STDFR33]

To put this into layman’s terms, banks don’t know their head from their arse.


You’ve gone into a bank wanting to open a bank account. You’ve kept waving an incorporation certificate in their face, and are now wondering why they won’t open a sole trader bank account for you.


The next time you speak to a bank, do not show them the incorporation certificate. Don’t mention a limited company. Don’t mention being a shareholder. Don’t mention being a director.

Just tell them that you are a sole trader and wish to open a sole trader account.

 

[scdirect]

Bit strange as to why you would register the ltd company name, but then want a sole trader's business account...

 

[Scalloway]

It used to be frequently advised here that a sole trader should register their trading name as a limited company to stop someone else stealing it.

 

[Deleted member 59730]

It used to be frequently advised here that a sole trader should register their trading name as a limited company to stop someone else stealing it.

And it is also frequently stated that all Companies House names are unique which is untrue. There are 899 entries for the name ACME.

 

[Scalloway]

497 companies whose name start with Acme according to the beta Companies House website. They are all unique as the second part of the names are all different.

https://beta.companieshouse.gov.uk/search?q=acme&page=1

 

[Deleted member 59730]

497 companies whose name start with Acme according to the beta Companies House website. They are all unique as the second part of the names are all different.

https://beta.companieshouse.gov.uk/search?q=acme&page=1

How is the name ACME protected by any of them?

 

[obscure]

It used to be frequently advised here that a sole trader should register their trading name as a limited company to stop someone else stealing it.

Yes but people say dumb stuff on forums. A Ltd company provides zero protection for a name. It is trading under the name that provides protection or registering it as a Trademark. You can trade as a sole trader using the name and will get more protection than registering the Ltd and not using it.

 

[japancool]

How is the name ACME protected by any of them?

It's not. But if you registered a company by the name ACME Condoms Ltd, at least no one else could register another company called ACME Condoms Ltd. Nothing to stop them from trading as ACME Condoms, or registering ACME Ace Condoms Ltd., or registering ACME Condoms as a trademark or running a website called ACME Condoms though.

 

[japancool]

Yes but people say dumb stuff on forums. A Ltd company provides zero protection for a name. It is trading under the name that provides protection or registering it as a Trademark. You can trade as a sole trader using the name and will get more protection than registering the Ltd and not using it.

Quite, but the OP doesn't seem concerned by that.