It was new to me when I first went Ltd. Long story short - sort of! I ran the training arm of a bigger company. The company I was working for 'suspended' me for dissent - basically constantly arguing with the general manager when he wanted to change my contract, refusing to discuss it as he wanted to put restrictions on my annual leave. I’d been there 15 years. It had contracts with the local authority education department as well as being a working garage/mot station. He was a **** and I told him so on numerous occasions. After a week of suspension, and after talking with Mrs Mottie, I decided I’d had enough working for them so I jacked the job in. I planned to go back to a workshop that we owned and had been renting out, and to continue working as a mechanic. Within a week the training company I previously worked for had the premises repossessed by the landlord as the joint tenant on the premises hadn’t been paying their part of the rent and my lot, being jointly liable, refused to pay their backdated rent. This had been going on for some time, unknown to me but known by my employer. Looking back, I fell into their trap by chucking the job in as they would have had to pay me a fair whack in redundancy. I had always got on well with the lady who ran the Borough education department and they were always pleased with the results I got for their students. Out of the blue, she phoned me up, asked me if I would like to to carry on the good work and if so, they would find me premises to work from and give me all the contracts my old firm had. I had to form a company though as the Borough couldn’t give contracts to individuals. They found me a school that had disused motor vehicle workshops and fitted it out for me. All my workmates at the old place came with me and became my employees. Now comes the ltd company bit. The Borough arranged for a local business manager to help me set up a Ltd company etc which he did, I took his advice and he set the company up there and then as well as registering the company for vat. Fast forward about 18 months when I engaged an accountant. First thing he said was "who the f*** set this company up"? When I told him, said the tosser had done it all wrong and had set me up as a company limited by guarantee, and not by limited by shares and I was chucking thousands away in tax and NI by not being able to take dividends. Furthermore, as an educational business, it was exempt from vat. I couldn’t charge it (which in knew and hadn’t been doing) but crucially, I couldn’t reclaim it which I had been doing for months on tools, equipment, supplies, consumables, phone bills etc etc and I had reclaimed thousands. He advised me to wind it up and keep my fingers crossed which I did and was never asked to repay the vat. He finalised my figures to show equipment to be under the amount that HMRC do not ask for vat reclaiming. He formed another Ltd company for me, this time ltd by shares.
* A little sweetner for me was when I read online that my old company had settled with the landlord by paying £50k to prevent going to court.
Point of my (short
) story being, just make sure you have formed the correct ltd company!
