Forming a Ltd company (I know, you are thinking not another topic)

[Amar]

One of the most striking changes contained within the Companies Act is that the appointment of a company secretary is now optional for limited companies.

From April 2008, limited companies can continue with their company secretary if they wish to, or if they wish to dispense with their company secretary, they should do so by informing Companies House via form 288b.

Now it is possible for a limited company to have a sole director and no company secretary.

Hullo, i have been reading a lot on forming a ltd company but i have not found some answers which are preventing me from going forward with company formation.

Firstly, i am new to contracting (9months experience) and am on a rolling contract which has been going on for about 2 months. The client itself is waiting for the contract which i have been hired for, therefore if they get the signoff , i stay for another 6+ months otherwise i look for another job. Chances are that they will get the contract therefore as i am currently contracting with the client through an umbrella company, my question is that can i setup a ltd company once i know that the contract is in the bag for 6 months at least.

I was thinking, of getting the agency to not renew and re-sign the contract with my ltd company once that is set-up. I don't think the client will have any objections as they are happy with my work. Ideally i would like to have the contract reviewed for IR35 compliance and hopefully can get it signed off with the limited company.

So please help me with the following:

1) What is the best way of transferring the existing contract from umbrella to limited considering the contract is a rolling one with only two weeks extension during each roll.

2) I am basically, on my own so i cant have any secretary but the quoted article i found says that a secretary is no longer required.

3) I had to move back to parents house due to family issues, so can i use that as the registered address of the company?

Please, advice whether all this is possible, I am loosing quite a lot of money to the tax man due to being with umbrella therefore would like to become a bit more tax efficient.

Help please.

[malvolio]

Yes it's all possible.

BTW - Go read the guides.

[London75]

Regarding the Umbrella question, I suppose it depends who you're with but I have first hand experience of moving from Umbrella to Ltd as I did it last Friday. As long as their weekly/monthly fees are paid and they have a no-termination-fee policy then there shouldn't be a problem.

Your client should probably just email them letting them know there will not be an extension to this contract.

You then quickly set up a Ltd and get a new contract sorted direct with client. I assume there is no agency involved, I was lucky and direct with client but I'd imagine it's a little more convoluted with an agency.

[Amar]

My intention is not to bypass the agency and go direct with the client. I just want to cut the umbrella company from equation. The main question is with regards to IR35 i guess, once i am with my ltd, i am going get the contract reviewed for IR35 compliance. My main worry is that, the contract will be the same contract which started off as inside IR35 due to the umbrella company and now it will be outside IR35.

Other confusion is about running the business from home. Its not my house but right now is my only place of residence so can i use this as business address or do i get a POBox?

I guess, i should just get answers to these questions from an accountant. I have read through the online guides and other topics and understand most of the issues. Just waiting for the contract and answers to few of these questions.

Thanks.

[Zen Contracting]

Originally Posted by Amar

Hullo, i have been reading a lot on forming a ltd company but i have not found some answers which are preventing me from going forward with company formation.

Firstly, i am new to contracting (9months experience) and am on a rolling contract which has been going on for about 2 months. The client itself is waiting for the contract which i have been hired for, therefore if they get the signoff , i stay for another 6+ months otherwise i look for another job. Chances are that they will get the contract therefore as i am currently contracting with the client through an umbrella company, my question is that can i setup a ltd company once i know that the contract is in the bag for 6 months at least.

I was thinking, of getting the agency to not renew and re-sign the contract with my ltd company once that is set-up. I don't think the client will have any objections as they are happy with my work. Ideally i would like to have the contract reviewed for IR35 compliance and hopefully can get it signed off with the limited company.

So please help me with the following:

1) What is the best way of transferring the existing contract from umbrella to limited considering the contract is a rolling one with only two weeks extension during each roll.

2) I am basically, on my own so i cant have any secretary but the quoted article i found says that a secretary is no longer required.

3) I had to move back to parents house due to family issues, so can i use that as the registered address of the company?

Please, advice whether all this is possible, I am loosing quite a lot of money to the tax man due to being with umbrella therefore would like to become a bit more tax efficient.

Help please.

1) You are an employee of the umbrella so you'll need to "resign". The vast majority of umbrella's don't require notice so just let them know that you'll be moving on. Then get your agency / end client to end the contract with the umbrella and set up a new one with the limited company that you form. Before you can do this you need to....

2) Form a limited company. This is a quick process. What is not so quick is getting a bank account set up for the new company. Therefore I'd advise that you get the company formed and the bank account application in ASAP.

3) You are quite correct that the Companies Act 2006 no longer requires a private limited company to have a Company Secretary.

4) Yes you can use your parents house as the registered office. If by any chance their home is in Scotland make sure you form a Scottish company (formation services and accountants tend to default to the formation of English companies) as an English company cannot use a Scottish address as its registered office.

Regards.

David.

[TykeMerc]

Originally Posted by London75

Regarding the Umbrella question, I suppose it depends who you're with but I have first hand experience of moving from Umbrella to Ltd as I did it last Friday. As long as their weekly/monthly fees are paid and they have a no-termination-fee policy then there shouldn't be a problem.

Your client should probably just email them letting them know there will not be an extension to this contract.

You then quickly set up a Ltd and get a new contract sorted direct with client. I assume there is no agency involved, I was lucky and direct with client but I'd imagine it's a little more convoluted with an agency.

Not tricky when there's an agent involved, just keep them informed and let them know at renewal that they will be issuing the contract to a different entity. The agent doesn't care so long as the services are provided and the entity they contract with is legal. If memory serves agents can't deal with sole traders for some obscure reason that's why I set up a Ltd donkeys years ago.

1. Set up Myco Ltd company
2. Request P45 from Umbrella
3. Contract signed by MyCo Ltd

[Amar]

Thanks, guys

I am going to book a meeting with an accountant soon. I just wanted to make sure that before i do that , i can atleast form a ltd e.g. living with parents might have been a problem.

here is what i will do now...

1) Form the company
2) Get the business account sorted
3) Leave umbrella and switch the contract to new company