Hi
I have set up a limited company registered at my home address. You cant just use the money for your own purposes you have to pay yourself a salary and dividends and then use that as you wish. Setting up a ltd company is really easy as there are no end of companies and accountants that will do it for a small fee. My guess would be that sole trader insurance would be costly but as a limited company I have employer, employee and public liabilty insurance and it all costs arond £60 a month
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Richard How FIAP MAPM
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I am of the view that from a trader and customer perception, the Limited company is always the best vehicle for credibility. I understand both can go broke, be rogues, etc, etc, but in business perception and credibility are great assets.

Sure, there is a bit more paperwork and reporting requirements, but in the final analysis, not very much more than that of a sole trader.

One other minor point is that after registering a ltd co. name with Companies House, that particular name is 'somewhat' protected, whereas as a sole trader's John Smith trading as 'Eastern Imports' - Eastern Imports is not neccessarily protected.

To further Richard's advice above, he may have scared you a little with his £60 per month insurance overhead. You may not need employee insurance, though I would seek professional advice on this because you may be deemed to be an employee. Similarly with Public Liability. If you have no clients/traders attending your property, you would not need the liability insurance.

Cheers,

Nigel
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Startups Awards finalist 2005.  

Thanks a lot guys.. U all have been very helpful..

I have written an article: http://www.squidoo.com/sole-trader-vs-limited-company which may help you to see which structure could be best for you.

Also Business Link can be helpful in explaining the general concepts of different structures: http://www.businesslink.gov.uk/bdotg/action/layer?r.s=m&r.l1=1073858808&r.lc=en&r.l3=1073865730&r.l2=1073859215&topicId=1073865730&r.i=1073789606&r.t=RESOURCES
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UK Limited Company Formation - £24.99

Hi,

The limited company is a legal entity in its own right, so you are right in terms taking liabilities away from yourself directly, but as a company director you still have responsibilities, and in certain cases you can still be pursued personally for the company's liabilities.

You also have to think about the practicallites of running an import business. Presumably you will find it difficult to gain credit from suppliers abroad initially as the risk will be too high for them. In this case you will have to fund the business out of your own pocket or through a loan. Setting up a limited company means that the company will have no credit rating at the start, so the chances are you will need to borrow in your own name in the first instance anyway.

I would have thought in the first instance you should start as a sole trader, and as the business builds transfer it into a limited company as you will be risking your money anyway. The statutory and filing requirements for a sole trader are also less onerous than for a limited company.

I am working as an accountant, so if you need any other advice then please email me at DAAccountingServices@hotmail.co.uk.

Kind regards

Dom