Personal Credit and LTD Company Credit/Debit Cards

[Hawkwind]

Good day all,

I envisage that my personal credit rating will shortly be severely restricted and I'm wondering how this could affect my functioning as a sole trader with things I neeed to buy using cards. If I made my company Ltd, could I continue to operate the business without my personal credit rating affecting its ability to purchase using credit/debit cards. Any knowledgeable advice would be welcome.

Hawk

[Brian Turner]

Hi Hawkwind, and welcome to Platinax.

Sorry to hear that your personal circumstances don't sound good - but simply changing from a sole trader to a limited company can involve all sorts of issues and complications. Not least, you would likely have to change your business bank account, which can be a stressful process to move to at the best of times.

However, there may be tax advantages to yourself and business in moving to a limited company regardless of any credit rating issues, so I would definitely advise you to talk to your accountant about this (I sincerely hope you have one - if not, get one!) and pore over the pros and cons of changing your company identity - especially if any change in credit rating could directly impact your business.

Anyway, hope that helps.

[TWD-Tony]

I don't know your personal circumstances so don't take what I am about to say personally...

If you (or anyone else) finds themselves in serious debt then you may get to a point where balliffs are used to seize your goods to sell and recoup some of the money that you owe... As a sole trader everything that you own - regardless of whether it is business related or not can be taken, if on the other hand you were a director of a limited company then the companies assests belong to the company and NOT the individual directors so they cannot be taken.

Like I said at the start of the post - I am not saying that your personal circumstances are that bad it's just another piece of info for you and anyone else reading.

[Babylon]

Hi Hawk,

I am sorry to disappoint you but by going "Limited" is not going to improve your financial situation in the short term. The incorporated business will have very little track record of its own and therefore any funder will look at your own individual track record before granting any credit to the company. Obviously, this would be counter productive in your situation.

I suggest you talk to someone at a Citizens Advice Bureau and see whether you can come to some sort of arrangement with your existing creditors before they get out of hand.

Best wishes,

[magicnet]

Originally Posted by TWD-Tony

If you (or anyone else) finds themselves in serious debt then you may get to a point where balliffs are used to seize your goods to sell and recoup some of the money that you owe... As a sole trader everything that you own - regardless of whether it is business related or not can be taken, if on the other hand you were a director of a limited company then the companies assests belong to the company and NOT the individual directors so they cannot be taken.

You're right, in a sense its protection for your business, but what if you're the only share holder in the company?