simplymo started this topic @ 19:25 on 31/07/2007
Hi guys,
I am a sole trader and I want to register my company (as a sole trader). Do I need to do company formation or do I just register the company's trading name?
Thanks
RE: Sole trader: company registration
TFGTV | 01/08/2007 08:49 AM
This is one of those questions that tends to suggest you have a little more research to do. Ultimately I'm going to defer to the excellent advice the accountants on the forum can give you but I will stick my neck out.
By Company formation I assume you mean setting up a limited Company? This may or may not be a good idea and you really need, at the bare minimum, to do some reading.
Robert Browning's "Setting up and running a limited company" is a start (but only a start!) Ultimately, see an accountant... A real (chartered) one!
There is a minimum of formality involved is setting up as sole trader and, yes, you can (subject to some rules) just set up "trading as" 'whatever'. You must register with people like inland revenue etc. BUT ultimately protecting your trading name is another matter.
Some years ago I heard it said that the only REALLY stupid questions are the ones that no-one asked. You're (quite rightly) asking quite a basic (yet important) question here. And , with no disrespect intended, that tends to make me suspect there may be fundamental gaps in your knowledge; Personally, I'd ask my local enterprise agency if they have any training/advice sessions available that might help you answer this and some of the other vital questions that may not have come to notice yet.
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Matt Quinn.
www.tfgtv.com
Corporate Communication for SMALL Businesses!
RE: Sole trader: company registration
James Smith | 01/08/2007 08:54 AM
Mo,
Its worth taking a few seconds to get the terminology right as this should help your understanding. If you are a sole trader you are NOT starting a company. A company is short hand for a limited company which is a new legal entity registered with companies house. What you have is a business not a company, this might sound like a pedantic point but it is an important distinction.
As a sole trader you do not register a limited company (This probably now sounds obvious in light of the above - but this is a common misunderstanding). You also don't have to register the trading name anywhere but you fan if you wish use the national business register (which is a private company). This effectively is an insurance plan to help you meet the costs of any legal action if somone tries to "pass themselves off" as your company. Depending on what you do will depend if this is worthwhile.
All you need to do is to register with the inland revenue within 3 months of starting to trade - I normally suggest people don't register until they are trading and sure their business will be a success as its a pain to de-register etc later on. This is why they give you 3 months or there would be lots of extra registrations/deregistrations occurring all the time with ideas that didn't get off the ground.
Hope that helps
regards,
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James Smith
Chartered Accountant
www.jamesesmith.co.uk
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Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT
RE: Sole trader: company registration
simplymo | 01/08/2007 07:59 PM
Thanks guys. I have been running a company for about 3 months and it's gradually coming up. I am just concerned about te name of my biz that someone might try and register the name and start trading. So what happens to me if some else register the name. All I need to know is what to do to prevent someone else from using the name besides me wanting to have my company properly recognised while still trading as a sole trader. By the way I am registred with the inland revenue as self employed.
RE: RE: Sole trader: company registration
TFGTV | 02/08/2007 01:26 PM
I think much of the confusion arises because sole traders often adopt the word 'company' in their name. And of course we often think of our sole-trader businesses as separate entities even though they are not.
I'm interested in (and somewhat surprised at) James' recommending "The National Business Register". As an 'insurance policy' this has, perhaps, much to commend it. As a database or 'register' of business names though (which is what it presents itself as) it's virtually useless in my opinion. As are most of these privately run 'registers'.
For example I typed in the name 'Clydeside' then ' Clydeside TV and finally 'Clydeside Television Productions'. All trading names I've used for in excess of 21 years. None came up! I also took the time to type in a few of my friends and associates trading names. Out of 25 long established businesses only four were on their lists!
Similarly, anyone buying the Clydeside.TV domain (which the 'register' said was available') with a view to using it in respect of video, multimedia or TV production had better prepare for the wrath of my solicitors!
James WAS clear that the 'register' is a form of insurance. However my 'beef' with this is that it markets itself AS a 'register', and in that respect it is sadly lacking to the point where I think its own trading style is misleading. Personally I would prefer NOT to do business with a Company that (mis?)represented itself in that way. What this 'register' really does is sell you some very specific legal insurance. I suspect one of the lawyers or insurance brokers could direct us to more comprehensive legal cover.
James has (in other posts) rightly hinted at some of the pitfalls of registering a limited company where no such thing was warranted. I think a non-understanding of these issues is common. Many though are brought to the idea of registering a limited company largely in a bid to 'register' their trading name with a government body and make their business official. Indeed several registration agents will float this as a 'selling point' for their services. Many people even suppose that registering as a limited company is REQUIRED!
Sadly, one of the things I've never seen, is a good solid article telling people why they possibly SHOULDN'T and dont have to register their business as 'limited'.
------------------------
Matt Quinn.
www.tfgtv.com
Corporate Communication for SMALL Businesses!
RE: Sole trader: company registration
James Smith | 02/08/2007 04:21 PM
Matt,
Re the National Business Register I wasn’t really intending to actively recommend it, more to state that it exists and its only real benefit is legal fees insurance. I certainly don’t rate it as any good way of finding out if businesses exist – your friend Google is probably far better than this as most people have a phone number listing in some directory or other, even if they didn’t intend to.
It may however be useful for business for whom the brand name is important and want a cheap(ish) way of getting some protection in the early days before its hard to prove its your IP and not someelses. The best protection is of course to actively trade and be well known!
Re Ltd co.s, I do seem to bang on about structure a lot - people often don't understand that a simple £35 on-line form can bring so many complications!
Regards,
------------------------
James Smith
Chartered Accountant
www.jamesesmith.co.uk
---------------------------
Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT