Working from home

[Elfin]

Hi All,

I have just started to work on a self-employed basis from home. I would like to form a company but don't know whether to go for sole trader (trading as xxx) or ltd company.

I cannot use my home (rented) as a place of business under the terms of the tenancy agreement, so I use a mailbox for all work-related post. So the question is, can I use the mailbox as a registered company address? All that stuff about having a company name plate clearly displayed on the registered premises is what's bothering me, as I clearly won't be able to do that. Does anyone actually do that anyway?

My business is documentation services (writing/editing etc) and I don't intend taking on any employees, although I may outsource work to others if I get too much on.

All advice welcome.

Thanks

 

I work as self-employed from home in a similar job. I'm a sole trader - I didn't see the point of becoming a limited company, with all the extra paperwork. It doesn't stop me outsourcing work if need be, at busy periods.

If you are a sole trader you are NOT a company, btw.

Why not start off as a sole trader? You can always change and go ltd later if you feel you need to. But get proper advice first from an accountant and lawyer or from Business Link.

 

[bwglaw]

You need specific advice as to whether you should become a Limited Company. It is too cheap to set up but can be costly to maintain, with a liability for Corporation Tax at 19%, in addition to paying yourself a salary with 22% tax etc

You should be OK to work from home under a tenancy agreement, provided you do not exceed roughly one small room to work from or to store your business stock. It will become a 'place of business' if the business occupies a large part of the property.

Jonathan

 

[Kent Accountant]

I also doubt whether it would benefit you to incorporate the business, but I do not know all your circumstances.

Out of interest, to go back to your original question, You cannot use a PO Box number as the company's registered office. If it is an accommodation address, then you would need to check with the provider

 

[Alison Geldart]

I work as self-employed from home in a similar job. I'm a sole trader - I didn't see the point of becoming a limited company, with all the extra paperwork. It doesn't stop me outsourcing work if need be, at busy periods.

Me too. I was advised by the local enterprise agency that there was no point in becoming a limited company - too much hassle. I do know people who do similar things who are ltd companies, though - so get some proper advice.

I'm also in rented accommodation - do you have contact with your landlord? Luckily, we get on really well with our landlord, and I just asked and he had no problem with me working from home/using it as a business address.

 

I live with my partner and he owns the house outright. So I have few overheads.

 

[autolycus]

There are companies who will allow you to use their premises as the address of your Ltd company's registered office in return for a monthly fee.

 

[Elfin]

Thanks for your replies everyone. Good to see that there are a few people here in a similar line of work too. I'd like to contact a couple of you off-forum for some specific advice if that's ok.

I think I'll go Sole Trader to start off with and see how it goes. I've got enough to be getting on with without all the extra hassle.

I'll check the tenancy agreement again, but I do remember that it states that the property cannot be used as a place of business. Not sure if it says "without prior written permission", in which case it might be worth asking. The "landlord" is a country estate, so I get to deal with the estate manager only.

OK, so just got to get an accountant now...

Thanks again.

 

Elfin, I belong to the Society for Editors and Proofreaders, which is my professional body, and probably more than half the 1300 members are sole traders. The vast majority of members work from home as freelances (some members work in-house). There are members who have formed limited companies, but I suspect many of these do so at a later stage once their business was well established and there were practical reasons for going limited.

PS, if you want to contact me offline with questions, feel free to do so.

 

[autolycus]

I'll check the tenancy agreement again, but I do remember that it states that the property cannot be used as a place of business. Not sure if it says "without prior written permission", in which case it might be worth asking. The "landlord" is a country estate, so I get to deal with the estate manager only.

OK, so just got to get an accountant now...

Thanks again.

Even if the agreement doesn't say "without prior permission", I think it is still worth asking the landlord. The chances are when they talk about a "place of business" they just want to avoid lots of members of the public calling round to see you, lots of stock being stored, vehicles being stripped down on the driveway, etc. It's unlikely they'd object to a bit of clerical work being done on the premises.

For an accountant you could do a lot worse than talk to Alpha from these forums - www.alphalimited.co.uk.

David.

 

[Elfin]

Will give it a go. Thanks all.

PlainText, I'm a Technical Writer (software manuals and online help systems primarily), but I also specialise in business documentation. I'm currently working as an Instructional Designer for software e-learning. I belong to the Institute of Scientific and Technical Communicators. I'll drop you a line for a chat, thanks!

 

Please do - I work for a couple of scientific companies - at least one of them is likely to need a technical writer.

 

[anarrowmiss]

Hi
With respects to limited company formation and assuming landlords agree to the home as being the registered address we think we will still have a big problem with the need to display the plaque. The main reason being we live in an apartment block in the city centre and on the third floor with our main entrance door nicely tucked away in the corner with no passers by. The block has a secure entrance so only residents have access(or let others in by eloctronic means).
No clients will be coming to this address as we will be operating from a marina to meet and greet them etc (narrowboat hire). So ...the only question outstanding is this plaque???
Many thanks hope someone can help.. ps i rang companies house but they said we needed legal advice???

 

[bwglaw]

Hi
With respects to limited company formation and assuming landlords agree to the home as being the registered address we think we will still have a big problem with the need to display the plaque. The main reason being we live in an apartment block in the city centre and on the third floor with our main entrance door nicely tucked away in the corner with no passers by. The block has a secure entrance so only residents have access(or let others in by eloctronic means).
No clients will be coming to this address as we will be operating from a marina to meet and greet them etc (narrowboat hire). So ...the only question outstanding is this plaque???
Many thanks hope someone can help.. ps i rang companies house but they said we needed legal advice???

Although the Companies Act makes it clear that Limited Companies must display the business details at the place of business it is rarely the case that Companies House checks and you do not need to concern yourself too much with this requirement. However, Companies House are strict that you comply with the requirement to disclose the statutory details (Reg No, Place of Registration, Full Ltd Co name etc) on your letterhead, invoices etc

Jonathan

 

[anarrowmiss]

Thanks ever so much for that reply. After much discussion we thought we may go ahead with the registration at our home address and just hope they don't need to come to check. At the end of the day if worse comes to worse we will have to find a registered address elsewhere. I know there are places that we can rent but seems a bit extravagant just for a plaque as we would have no intentions on working the office from there. Anyway once again many thanks.

 

[bwglaw]

Do bear in mind that the address you register as your Registered Office will be available to the public. You can use an accommodation service, an Accountant or your solicitor. An accommodation service may be better where you can use for Registered Office and a trading address.