Sole trader Virtual address

[Barba]

Hello,

I'm looking at setting up a business where I'm producing cosmetic products from home and selling online.

After reading a lot of posts and guides I've decided that starting as a soletrader would be beneficial to me (easier account keeping and thus costs). I'll also be working fulltime to supplement my income.

As I'll be producing the products from my home I understand this address would have to be shown on my website, invoices, packaging and labels, which is something I don't really want.

I've seen that virtual office address's can be used but am not too sure which service would work best? Customers may have to send back items for whatever reason and maybe a few business letters? I would ideally like somewhere local where I could pick up the packages if required. Being
a sole trader would I also have to show my company name as Barba Smith t/a Cosmetics company. To me it doesn't look that professional on a product.

I also see that a registered office is only required for company registered at companies house. Is it worth registering my company name and keeping it dormant should my products prove popular?

Can't believe how much there is to think about when setting up a company on your own!

Thanks in advance

 

[StevensOnln1]

If you want recommendations for a virtual address provider local to you then you'd better say where you are.

As a sole trader you are "Your Name trading as Business Name" so you would need to state that on all business documents (letters, invoices, receipts, etc).

Forming a company and keeping it dormant only prevents someone else forming a company with the same or a very similar name. It does not prevent anyone else trading under that same name. Don't forget that dormant companies still have to file accounts and annual returns each year.

 

[Barba]

Thanks for the reply StevensOnln1.

I'm currently based in Buckinghamshire. I have contacted my local enterprise centre and they offer a virtual office service. £249 for a registered office and mailing service. Looks quite expensive to me.

Looking at the big picture it may just be better for me to start trading as a Ltd and put up with the extra accountancy costs. I think a meeting with an accountant is due!

 

[TODonnell]

I think you you should just put "MiCosmetics" on your website and advertising and worry about a Limited Company later, if you're just starting out. When the money's rolling in and you start fretting about tax issues or being sued, then get a company formed. "Simple is good engineering", especially when you're starting out. You may find the paperwork involved in maintaining a limited company onerous.

You can still use a virtual address for correspondence and on your website. I'd guess you'd have to put your real name (Barba trading as MiCosmetics) on documents relating to money e.g. where you take payments. I don't know if it has to be everywhere. You'd need an informed legal opinion.

If you can, use your home address or some other for your returns; virtual office providers are generally either not happy to process parcels or charge so much it will eat into your profits; parcels can be big items to tote to the post office and are expensive to post, so they'd have to pass the cost onto you.

Or I guess, as you suggested, you might find a provider who's happy to have parcels pile up in their office! I'd be genuinely curious how common that is.

 

[MonkeyTer]

You could use a virtual address for everything, and only give your actual returns address (your home) to customers who want to return something, which should be a small minority. There are a few places that will do cheap virtual addresses. I doubt in this day and age anyone will be posting to things, will they? Except the few returns goods. 249 for a virtual address is extortionate imo.

 

[MonkeyTer]

btw. just use your trading name on your website. you dont need to put yourname t/a business name on the website, just on invoices, your bank will even allow payment into your account in the name of the business only, if you have a myname t/a my business bank account.

If you were limited you are even more exposed personally, as your name is freely available for the ltd company at companies house. You could use a directors service address though, so as a director you don´t "have to" use your actual home address, there are other virtual office companies who will do director service addresses for a much smaller fee, but they will only accept certain mail on your behalf then, like from HMRC... but that should be fine imo, if you just want to hide your actual home address - PS. I don´t think it´s a bad idea at all to hide your home address, I certainly do.

 

[DavidP2P]

I use my accountant's address and pay them for a mail-forwarding service. Would that work for what you want to do?

 

[MonkeyTer]

that is a very good point. I do this with my spanish accountant for a spanish business i have, and he charges no extra, it is included.

 

[FirstClassVirtualOffice]

Can I give you a tip if you use your home address because you cannot afford £250 (but this is Buckinghamshire - one of the more expensive places to live in the UK I think, so really, not expensive compared to a real office, at £20 a month).

However the tip is that you can give your house a name e.g. Oxford House. This sort of adds a bit of a spin on the address, as we are Armstrong House but our building is a large building not a house. But a 3 bed semi could be called 'Oxford House' something that sounds a bit businessy if you get my drift. This can make your address sound that bit more professional. So your address could be:

Oxford House
20 Willow Drive
High Wycombe
Bucks

You could choose a house name that relates to the street name e.g in the above made-up example, Willow House. But of course you must always put your full address below the house name.

You can still try Googling for local virtual offices; try serviced offices as a starting point as they usually add on this service, though not everyone does it.

You also only need display a trading name and not Barbara Smith t/a apart from where legally required to do so.

Having a Limited Company is a separate thing to the address, but if you do go Ltd even if keeping it dormant, get the virtual office address sorted first, because then you can use it to register as a directors service address too, because once you register with a home address and then change it to an office/virtual address, your address history is still available (Joe public can pay to download your data for a few pounds if someone really wants to track you down). So registering a virtual office from the start keeps your home address private so only Companies House know what it is.

It's preferable to keep one address for everything to avoid any confusion, but if you do not want to use your home address for certain things, decide what those are and use a virtual office for those things. As above, some will accept parcels and some won't so do check. if you don't get many product/customer returns then it should be okay especially if they are small packages. But it could be an expensive option to use a virtual address if you get a lot of customer returns as you are paying for the postage forwarding to you. As above, i'd give the customer your home address for returns but still expect some to go to another address displayed on your website as customers do not always follow your instructions and will just send to the first address they see.

 

[Dynumo]

Something worth noting is that you can also get hot-desking with address use (sometimes cheaper than the costs of virtual addresses).

As a member of a hackerspace (which is member owned), I get to use both the hot desking area and the address for £15/month.

Additionally, starting out people often underestimate the power of getting out of your house. More gets done when you feel like you are working, and other people don't bother you as much.

Also, some virtual address companies can be slippery people...

 

[Barba]

Thank you all for your replies. Some very good points to think about.

 

[Barba]

What would happen if you purchased a registered and directors address, and a customer/supplier were to send post such as an invoice to that address? I don't think I'd require a mailing address, as MonkeyTer stated, I could just give out my home address if a customer wanted to return an item.

 

[TODonnell]

A customer might return a package to the Registered Office. That does happen. I'd image you'd have to put a sticker on the (back of?) the item package, stating the return address, as well as on the accompanying receipt.