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Ask HN: Should I make myself into a limited company?

2 points by Ellipsis753 ↗ HN
Hello. I am just starting out as a freelancer after finishing 6th form college. I live in the UK and this means that I'm 18 and just starting to look for work as I am not going to University.

I would like to appear professional and to get work making and changing websites as well as doing programming projects for people/companies. I have been programming for quite a few years and have helped some people in the past. I am currently making changes to a website for someone and I normally charge £10 ($15) per hour for my services.

I am interested in what I should do next and have started to try to brand myself as a company. I decided to call the company If Not Equal and have registered the domain name (no website yet). Now I am thinking about registering as a limited company. Is this a good idea? I would then be able to have a bank account and checks made in the company name and I will also have some business cards made. I am thinking of registering as a limited company and issuing 1000 shares for £0.01 each (of which I would own all). Does this seem reasonable and would this lead to complications with cash flow (by being a company)? Would I still be able to transfer any payments from the company account to my own in a timely manner or would I only be able to pay out once per year or the like? In short, is it worth becoming a company?

To freelancers out there I would be very interested to hear what you personally did and any advice you have for me. Also if you know of any guides that you could recommend for people in my position that that would be very helpful.

Thank you so much for reading.

4 comments

[ 6.2 ms ] story [ 17.7 ms ] thread
lifeguard
When you are bootstrapping, save all your cash. Once you have a lot of customers and income you can invest in administrative infrastructure. I assume since you are 18 you do not have large assets to protect.
Ellipsis753
Ok, so to check, you don't think I should bother becoming a limited business at this point in time? (It's only £15 but I guess that more paperwork would be involved.)
lifeguard
Well, if you own a house or a nice car or have 100,000 euros in your bank account, then yes get a LLC.
b0o
well, I think the purpose of you wanting to get an LC isn't to protect your own personal assets, which is the purpose of LCs. I think you want to look more professional, which a fancy business card can do, and maybe a small office, or rent part of an office, maybe split an office with someone.

Another thing you may want to consider for LC's are tax rates. I'm not certain about how it works in the UK, but you may also be subject to higher (or lower?) taxes on your income.