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New Contractor - Sole Trader to LTD?

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    New Contractor - Sole Trader to LTD?

    Hi all,

    I'm pretty new to this so apologies for the silly question(s) but everyone seems pretty helpful on here so I'm hoping someone can share their thoughts. I recently entered into an "Independent Contractor" contract using my personal name on the contract, I believed at that time I wanted to trade as a sole trader.

    However, after doing some research, I believe that having an LTD would serve me better. Question: From now on if I choose to invoice the company using my LTD (instead of my personal name), will I STILL be recognised as dealing with them as a "sole trader" since my original agreement has my personal name or will this not matter anymore as the company will essentially be paying me via my LTD and therefore be implicitly trading directly with the LTD based on their actions?

    Really appreciate this. Thank you!

    #2
    You will need a new contract.

    A Ltd Company is a separate legal entity to a sole trader.

    Comment


      #3
      If through an agency and, if mid way through the contract, you will be best to be assured;

      a) there will be a further renewal, and
      b) sort out a Ltd Co in readiness for the next renewal.

      Chance are that trying to change mid way will incur ambivalence on behalf of the agency.

      Comment


        #4
        Thanks guys! That makes sense. Could I use the substitution rule to do that instead and would it work?

        Comment


          #5
          To do What, exactly?

          And before you answer;

          1. Do you have a substitution clause in your existing contract?
          2. Do you think if you tried to insert a sub, the client would Actually permit it, in like, real life?

          Comment


            #6
            Hi Simes,
            So the idea would be to “sub” my sole trader business with my limited business instead and therefore transfer all liabilities and responsibilities over.

            For
            1. The answer is yes
            2. No, if it were someone else. But if it was my own limited business I can’t imagine why they would say no.

            Comment


              #7
              Originally posted by sqeakypenguin View Post
              Hi Simes,
              So the idea would be to “sub” my sole trader business with my limited business instead and therefore transfer all liabilities and responsibilities over.

              For
              1. The answer is yes
              2. No, if it were someone else. But if it was my own limited business I can’t imagine why they would say no.
              If you're working in IT and if you're working through a bona fide recruitment agency, I'll be majorly surprised they let you work on a sole trader basis.

              If you are working through a bona fide recruitment agency, they may not want to change the trading arrangement until any renewal starts.

              Yes, a limited does what it says on the tin, limits liability but it doesnt mean anyone could operate gung ho!

              But the real question is, are you intent on working continually via a limited co in future? If not, have you considered a reputable umbrella (quiet at the back!)?

              Comment


                #8
                Would you be inside or outside IR35? If the former, then you are better sticking as a sole trader (although there are some considerations around limited liability protection of a Ltd).

                Comment

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