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Business founders/entrepreneurs

Limited company or sole trader?

4 replies

fluzle · 27/07/2020 16:46

Apologies in advance for how clueless I sound (and indeed am); in a fit of activity earlier this year, spurred on by an equally clueless friend, I set up a limited company as a side hustle.
The name that I chose and registered was very descriptive of the business I was running, which is closely related to my career. A few months in and I realise that I really don't want to be pursuing this side line - it's too close to my actual job, to be any fun, and I'd much prefer to try something more creative. I'm pretty crafty and would like to use my extra time trying to sell some of the things I make. I have not pursued any more clients once the work I had ended and so have no current income with it.
As the name of my limited company is now inappropriate, please can anyone advise on how to progress from here? I could change the name of my limited company to something more suitable, but I think I don't actually need to be a limited company anyway and could operate as a sole trader - it is not likely I'll ever be employing others or having shareholders! Would I be better to just close the company (I understand I can have it struck off after 3 months of no trading) and register as a sole trader? I'm embarrassed how little understanding I have of the bigger picture Blush
Apologies again for being so clueless - I feel really over my head in this and would greatly appreciate any advice.

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speakout · 29/07/2020 20:38

A "side hustle"???

Do you need to have a limited company?
I run a small profitable business as a sole trader- I don't need or want any other people having ownership.
If you have a huge turnover a Ltd compan may have tax benefits, but otherwise why?

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RedDiamond · 29/07/2020 20:50

Log onto Companies House and apply to dissolve the Company. Make sure that you have your final set of accounts produced so that you can pay any Corporation Tax or VAT (if registered) that is due. The fee I believe is £10 to dissolve a Company. Other than that, that's all you have to do, that and waiting approx 3 months for Companies House to acknowledge it.

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DoubleDessertPlease · 19/08/2020 01:52

There are advantages to running a small ltd company, limited liability being one of the main ones, also more flexibility on how you distribute your revenue (dividends, etc). You could make your company dormant I believe until you’re sure what to do, and also as you said change the name. If your business grows you might regret closing it, or want to move back to this model later.

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SunshineChatter · 19/08/2020 18:52

Limited liability was the main issue why I started immediately a a LTD. We are now too big not to be an LTD but I wanted the reassurance of my assets being separate from my business.

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