Need advice on when to form a Ltd. company?

[andynags]

All,

I am planning to quit my permanent job in mid-February and hopefully will have a contract soon after if not earlier.

I was thinking that I will form a Ltd. company (via NW or SJD) ahead of time, say in the first week of Feb, so that I can focus on obtaining a contract a week before my permanent job ends.

What are the pro and cons of above approach?

Any pointers will be immensely helpful.

Andy.

[stek]

I think you're being over optimistic re that first contract, two/three months is more realistic unless you are Gods Gift....

[andynags]

I think you're being over optimistic re that first contract, two/three months is more realistic unless you are Gods Gift....

Thanks Stek. Why is that so?

Also, will there be time in forming the company and all associated operational matters after securing the first contract? How do the agencies view the delay?

[stek]

Thanks Stek. Why is that so?

Also, will there be time in forming the company and all associated operational matters after securing the first contract? How do the agencies view the delay?

First time contractor, will be hard to convince the agent that you serious, put it this way, with the contract market shrinking as much as it has, what would you do? Experienced contractor or untried newbie?

You can form a company same day, bank account a bit longer but you won't need that immediately esp if on 30 day terms.

What's your skill set if you don't mind me asking?

[SteelyDan]

First time contractor, will be hard to convince the agent that you serious, put it this way, with the contract market shrinking as much as it has, what would you do? Experienced contractor or untried newbie?

^ +1 on this.

Not wishing to knock your confidence, but it's [always] difficult getting the first gig, especially so given the points which stek alludes to.

What's the motivation for shifting to contracting? Might be worth you asking yourself this question so as to avoid 'rose-tinted specs' type of view. It can be tough, and in no way is it plain sailing. Setting up the Ltd Co is the easy bit; making a success of it is not so easy.

[andynags]

First time contractor, will be hard to convince the agent that you serious, put it this way, with the contract market shrinking as much as it has, what would you do? Experienced contractor or untried newbie?

You can form a company same day, bank account a bit longer but you won't need that immediately esp if on 30 day terms.

What's your skill set if you don't mind me asking?

IT Architect with 15+ years experience currently in a top insurance firm. I couldn't quit earlier as I needed to sort out my british citizenship

[stek]

IT Architect with 15+ years experience currently in a top insurance firm. I couldn't quit earlier as I needed to sort out my british citizenship

How was citizenship an issue?

[Wanderer]

IT Architect with 15+ years experience currently in a top insurance firm. I couldn't quit earlier as I needed to sort out my british citizenship

Yeah, yeah, contracting is a closed shop and the money is completely rubbish so don't even think about trying to muscle in on our territory, especially as you are a foreigner.

Nah, seriously though - with that much experience you will be fine so jump on in. If at all possible try to get a contract lined up before you resign from your permie position or perhaps pre-warn them that you will be leaving and negotiate a short notice period. If that's not possible then be prepared for a period of unemployment...

I did a post a while ago of Common Noobie Mistakes, have a good read of that and make sure you don't get bitten by any of them or you will probably be met with derision from some of the hardened contractors here.

In particular, you need to make sure that you have a decent stash of money in the bank to keep you going (6 months worth should do it) or get yourself a flexible mortgage while you're still a permie (if you are a home owner). Also, don't go underselling yourself and taking a rate that's too low because there are a lot of hidden expenses that you have to cover for as a contractor.

Forming a company when you get your first contract offer is fine, it can be done in a day or so. After that, it will take a couple of weeks for VAT registration and a bank account to be setup but you will probably invoice monthly and then not be paid for a month after that so it's not such a problem.

You definitely want to engage an accountant from the outset though, their advice at setup time is invaluable and they will introduce you to a bank and help smooth the whole process over.

Good luck!

[eek]

IT Architect with 15+ years experience currently in a top insurance firm. I couldn't quit earlier as I needed to sort out my british citizenship

15 years experience should be fine. At first glance I read it as 15 years experience at an insurance company. Assuming that you can show experience across a number of industries you should be fine

[andynags]

How was citizenship an issue?

Unfortunately, I didn't have a straightforward case for citizenship. So professional advice was to to build a career history in a permanent job. Not sure if mattered though in hindsight.