How can I change from a sole trader to a limited company?

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Quick question here about limited companies. I’ve been working as a sole trader for a while now, but I think I am now ready to take things to the next level and move on as a limited company. Is there a particular set of steps that I need to follow in order to do this? Cheers

Answers

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It’s a relatively straightforward process to change from a sole trader to a limited company. Continue trading as normal, complete a company formation application for Companies House and start trading through your company as soon as your application is approved. If you register online through a company formation agent, your application should be approved on the same day.

The following information will be requested on the application form:

  • Company name - Cannot be the same as or too like another company name. You may be able to use your current trading name, but you will have to add ‘limited’ at the end.
  • Registered office address
  • Director’s details
  • Shareholder’s details
  • Whether you wish to adopt standard ‘model’ articles from Companies House, or create your own.

When your registration has been approved, you should notify all of your business contacts and update your website, business stationery and anything else that bears your current business name.

Finally, you must deal with HMRC:

  • Tell them that you are changing your business structure from sole trader to limited company - you can contact them here.
  • Register the company for Corporation Tax.
  • If you’re registered for VAT, you must tell HMRC within 30 days that your business structure has changed. Your existing VAT registration will be transferred to your company.
  • Register for PAYE - Even if you do not plan to employ anyone, you will still need to register for PAYE to be able to pay yourself as a director.
a year ago
 

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