Sole Trader and Limited Company

[RWA]

Just recently I have set up a Limited Company, however I may find it difficult to open a business bank account because I have only been personally discharged from bankruptcy in April this year.

My question is can I keep the Limited Company dormant and trade as a sole trader through my personal bank account, until such point I am able to set up a business bank account?

[DavidToohey]

If you have a personal bank account, I'd think your current bank would be the best bet for opening the Ltd company account.

Have you spoken to them yet?

[frauke]

Originally Posted by RWA

Just recently I have set up a Limited Company, however I may find it difficult to open a business bank account because I have only been personally discharged from bankruptcy in April this year.

My question is can I keep the Limited Company dormant and trade as a sole trader through my personal bank account, until such point I am able to set up a business bank account?

You can do what you like as long as you are upfront about it. The only thing is - if you don't separate your business finances from your personal finances they HMRC and anyone who you deal with have the right to look at all your non-business records.....

I had a friend, who was in the same position as you a while back. He gave me a 10% stake in his business (and became FD!) and in exchange I handled all the financial transactions for the company. Which it turned out he was extremely happy to hand over and leave to me to look after. Additional, the bank was happy to open the company bank account as long as he was not a signatory of the account. He rebuilt his credit rating, but unfortunately hes personal life has just disintegrated so he is now looking to wind the company up and immigrate to Oz....

[RWA]

Originally Posted by DavidToohey

If you have a personal bank account, I'd think your current bank would be the best bet for opening the Ltd company account.

Have you spoken to them yet?

I doubt my current bank would let me open a business account, they rejected me for a savings account because there was a cash card attached to the account, I had to open an ISA instead so I could deposit savings and withdraw cash as needed without any penalties.

[RWA]

Originally Posted by frauke

You can do what you like as long as you are upfront about it. The only thing is - if you don't separate your business finances from your personal finances they HMRC and anyone who you deal with have the right to look at all your non-business records.....

I had a friend, who was in the same position as you a while back. He gave me a 10% stake in his business (and became FD!) and in exchange I handled all the financial transactions for the company. Which it turned out he was extremely happy to hand over and leave to me to look after. Additional, the bank was happy to open the company bank account as long as he was not a signatory of the account. He rebuilt his credit rating, but unfortunately hes personal life has just disintegrated so he is now looking to wind the company up and immigrate to Oz....

If I am thinking about what you are saying correctly, I could potentially run my Ltd company through my personal bank account as long as I can distinguish which are personal transactions and which are business related transactions?

[frauke]

Originally Posted by RWA

If I am thinking about what you are saying correctly, I could potentially run my Ltd company through my personal bank account as long as I can distinguish which are personal transactions and which are business related transactions?

Yes. The only thing is its harder than people realize. It not about you distinguishing the different transactions - but will the HMRC be able to do it without any difficulty?

Years ago, I had a client who had a joint account with his wife who was also self-employed. It gave the HMRC the right to go through his wife's tax affairs, just because they were going through his. Any credit to the account that they could not provide written proof where the money came from was automatically treated as undeclared income. They both gave up self-employment and got "jobs" as they found the whole thing so stressful.

Also if you are going to receive cheques in the name of the Company, you will not be able to pay them into your account. If you ask your customers to make the cheques payable to you personally, they may refuse (which they have the right to!)

[promostamper]

do you have a business partner whom you trust that he can open in your name? can you open two current accounts and use one for the business until your credit rating is ok? or open an account in another bank and use that account?