Ltd or PLC

[Jmyatt]

I been in business since November 2004 and have always been a sole trader.

without going into to much detail I have developed a product that i have a patent on and wish to sell it.

With cash flow coming from the other side of the business and with a small team of staff i wish to market this product and try and sell it to a range of clients but most of them government/local council, police forces etc.

So in order to present a better kudos I think its time to go either ltd or plc (if possible)

I am currently VAT registered if that helps with either.

Does anyone know the pros and cons and possible costs of each.

[David Haycock]

PLC is a public limited company, Ltd is a private limited company - the one more suited to you. It costs about £35 to form LTD business online.

The PROs are that you limit your liability to the capital you start the business with. I suppose a LTD company also appears more professional. If you turnover above £50k you need to register for VAT regardless.

As the product has a pantent - what is it?

[inbakumar]

I agree with the comments above. At this stage, I suggest all you need is a "Ltd" company.

[Mark J Bateman]

Originally Posted by David Haycock

PLC is a public limited company, Ltd is a private limited company - the one more suited to you. It costs about £35 to form LTD business online.

The PROs are that you limit your liability to the capital you start the business with. I suppose a LTD company also appears more professional. If you turnover above £50k you need to register for VAT regardless.

As the product has a pantent - what is it?

50K is a guidline but I thought is was 62K

[bwglaw]

Do take professional advice whether you should form a Limited Company because the tax rules have now changed that CT applies to ALL profit, regardless of amounts. You also need to take other factors into account such as the cost of maintaining a Limited Company. However, as you employ staff and are VAT registered then incorporating may be for you.

If you are going to appoint more Directors/Shareholders then you will need to have a Director Service Contract and Shareholders Agreement in place. I have seen far too many businesses neglecting to have such agreements in place and only to find they pay much more than the cost of the agreements in legal fees to resolve the mess later.

The VAT threshold is £61,000 and you only need to register for VAT if you are likely to reach this amount.