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Switching from Ltd to Sole Trader

I’m not sure if I made a mistake choosing Ltd Company

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In October 2020 I set up a Ltd company for my Bootcamp Sessions I'm going to run. I haven't started it yet due to Covid, but now realise it may have been a mistake setting up as a Ltd company instead of a Sole Trader as I'm only going to be earning around 10k annually. How easy is it to change from Ltd Company to Sole Trader? and would I be able to keep my company name ( obviously without the "Ltd")

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By bernard michael
06th Mar 2021 09:38

If the company is still dormant don't start trading and notify HMRC that you are self employed. They will issue you with a Unique Tax Reference number ( UTR)

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Psycho
By Wilson Philips
06th Mar 2021 09:40

It’s bound to be said sooner or later so I’ll get it out of the way - your biggest mistake was probably trying to go it alone without an accountant.

To help you out, though, if you have so far done absolutely nothing you can forget about the company. There is nothing to ‘change’ and you just need to register with HMRC as self-employed. You can pretty much call your business what you want. If you’re precious about the name, you can hold on to the dormant company to keep the name should you (or your accountant) decide in future that a company might then be an appropriate trading vehicle. Otherwise, you can just ask Companies House to strike it off.

If you need help in doing any of the above - get an accountant.

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By PS6419
06th Mar 2021 09:42

Will I have to inform Companies House or liquidate my limited company?

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Replying to PS6419:
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By tom123
06th Mar 2021 09:56

if the company has not traded and there is nothing 'in it' you can complete form DS01 and pay a small fee to close the company.

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Replying to PS6419:
RLI
By lionofludesch
06th Mar 2021 10:19

PS6419 wrote:

Will I have to inform Companies House or liquidate my limited company?

No.

Not if you don't want to.

And you're prepared to keep up with all the filing.

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By kenny achampong
06th Mar 2021 10:53

Agree with what the others are saying. You definitely do not want a company for that level of income. You can reply to HMRC to tell them you are not going to trade if you are worried about them. And then you do nothing. You will get threatening letters from Companies House in 14 months from incorporation, but see the 5th Para, it will say 'if you no longer want the company you do not need to do anything'.

And in the meantime, google CWF1 and register online for self-employment. So it's all very easy and straight forward. But you probably want to consider an accountant for the tax returns of course.

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Replying to kenny achampong:
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By zebaa
06th Mar 2021 11:45

After all, trading as a sole trader, what could possibly go wrong ? Be very careful before you do anything further. Limited liability is not something to be discarded casually.

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By tom123
06th Mar 2021 12:24

Presumably as a personal trainer you would want lashings of insurance whichever way you trade?

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Replying to kenny achampong:
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By PS6419
06th Mar 2021 16:22

If I keep my limited company but leave it dormant, can I then become a sole trader with the same company name without “LTD” at the end of the name?

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Replying to PS6419:
RLI
By lionofludesch
06th Mar 2021 16:45

PS6419 wrote:

If I keep my limited company but leave it dormant, can I then become a sole trader with the same company name without “LTD” at the end of the name?

Aye.

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