Setting up New Company

[ContrataxLtd]

I've done a search but can't find an answer (before anybody asks).

I am seriously considering setting up a new company for a website idea I have (the website is up & running and getting plenty of hits). I want to add an online store which I don't know how sucessful it will be however much research I do.

I have some money in my limited which I would like to use to get the website revamped (store added etc) and the rest to buy stock. I don't plan to take any salary unless/until it becomes successful.

Question is: What is the best way to do this? Can I just loan money from my ltd to a new start & pay back as & when possible? My new co wouldn't be a limited to begin with so do I just set up as a sole trader? Is it best to try to keep it all within my own company (I'm with SJD & they've said their software can't cope with this)?

Anybody done similar? All help gratefully received.

Hi Gaz_M

As ASB has alluded to, if you are selling something that has the potential to cause you great financial loss (however small you think the risk is) then Limited Liability is probably going to be a good idea. There are also plenty of other considerations to think about before deciding on whether to setup a separate company, use your existing company or do it as a sole trader. There are too many to list here so it's really one for SJD to cover but a couple of pointers:

Using a separate company may mean that you are no longer permitted to use the flat rate scheme for either company so needs looking at carefully, I would expect SJD to be able to advise further on this.

If you setup as a sole trader and loan money from your Limited this will be classed as a directors loan with all the usual tax implications (BIK if over £10,000, s455 tax is not repaid within 9 months of yearend etc.). If you loan money from one Limited to another this is generally avoided.

Personally, I wouldn't let your accountants software play a part in the decision making of any of this. You can always use other software, your own spreadsheets etc. if needed.

Hope this gives some food for thought,

Martin
Contratax Ltd

[ASB]

If you are determined that they should be separate:-

- Yes you can loan money from your company to another entity. But check that your articles and memorandum allows it (it probably does) also that you won't end up needing a credit licence

- It seems more than a little odd that SJD can't cope with the concept of you having one company and also being a sole trader (or another ltd)

- Your costs will rise of course with 2 entities requiring dealing with

- Sole trader might not be sensible. Depends of course what the website is doing, but you have no liability protection on any of your personal assets as a results. Your website somehow causes someone a huge loss then you could get sued for it without limitation as to liability.

[Gaz_M]

I did a search and very oddly found that you've asked more or less the same question in October 2010

http://forums.contractoruk.com/accou...ml#post1218442

November 2014

http://forums.contractoruk.com/busin...w-company.html

And then this one?

Taking a long time to get this going isn't it

There does appear to be some other threads on the same topic that might help though..

https://www.google.co.uk/search?q=us...3xPMqcNqnwrIAD

I forgot about my 2014 thread on here - many thanks for finding that! My current project is a follow on to that so cheers. The 2010 one you found is completely irrelevant.

These things take time. My website has taken 18 months to climb up the Google rankings and I now find myself on page 1 for many searches which is why I want to add a store.


I'll know not to ask again.

[northernladuk]

I did a search and very oddly found that you've asked more or less the same question in October 2010

http://forums.contractoruk.com/accou...ml#post1218442

November 2014

http://forums.contractoruk.com/busin...w-company.html

And then this one?

Taking a long time to get this going isn't it

There does appear to be some other threads on the same topic that might help though..

https://www.google.co.uk/search?q=us...3xPMqcNqnwrIAD

[Gaz_M]

I've done a search but can't find an answer (before anybody asks).

I am seriously considering setting up a new company for a website idea I have (the website is up & running and getting plenty of hits). I want to add an online store which I don't know how sucessful it will be however much research I do.

I have some money in my limited which I would like to use to get the website revamped (store added etc) and the rest to buy stock. I don't plan to take any salary unless/until it becomes successful.

Question is: What is the best way to do this? Can I just loan money from my ltd to a new start & pay back as & when possible? My new co wouldn't be a limited to begin with so do I just set up as a sole trader? Is it best to try to keep it all within my own company (I'm with SJD & they've said their software can't cope with this)?

Anybody done similar? All help gratefully received.