LTD or Sole Trade

LTD or Sole Trade

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Looking for a bit of advice re: treatment for a new client.  Client bought into a baby franchise, offering classes to mothers up to a certain age.  On receipt of the paperwork (which didn't include any franchise agreement but I have asked for this) I can see that the majority of the paperwork is in the name of the director only, not the LTD co.  Furthermore, the actual initial invoice for the "territory"  and training is actually from another individual, not from the supposed Franchisor.            In addition to this, the client purchases supplies for her classes i.e. toys etc from the likes of Poundstretcher and Poundland which are being paid for from their own pocket rather than through the LTD account, which brings with it issues re: directors expenses and P11d.  This got me thinking that possibly it would be a better idea for the individual to operate as a sole trader rather than an LTD, especially since the business is loss making.  Can anyone give me any thoughts on this, especially since the intention has always been to operate as an LTD and a LTD bank account is in operation.  Just thinking out loud here.  Also apologies for the long paragraph, my browser isn't allowing me to create new ones.

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By BMary83
05th Sep 2013 16:31

I should add...

The "especially since the business is loss making" remark is due to the fact the Director also has employment income they could offset the loss against.  In light of the records, I really fee that this is an individual who shouldn't be operating a LTD and I suppose I'm looking for some backup as a sole practitioner myself.

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