I just had a meeting with prospect client, she took over the business from somebody in the family, and has no idea whether it is limited company or something else. No documents regarding startin up. I am going to do her book-keeping and the rest, but I am new to the business, just started up my own company, and have no idea where to check what her business is? can't find it on the WebCheck.
Was she given a copy of the previous year accounts?
May not be obvious from WebCheck as often the Ltd Co name is not the same as the trading name you've been given, but the accounts would provide the answer.
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Jenny
Responses are my opinion based on the information provided. All information should be thoroughly checked before being relied on.
She doesn't have anything from the previous owner of the business. That was her mother in law or something and they don't contact since then. Should I do just self assessment for her? doesn't use bank account, just cash for everything. What would you suggest doing?
I would contact your professional body, I am sure they could advise.
If you are not registered with one then I would ask the question how can they take over a business without having any information or paperwork?
Do a WebCheck anyway. Have you got any paperwork at all, like copies of invoices or letterheads which might have a registered number or something on them?
Sounds very strange, but if it was a ltd then there would be some sort of paperwork for the takeover, like share transfers, unless she is just doing the work and not actually taking over ownership.
I guess technically she could just do the business and take on the clients as a sole trader, but need to be careful on the use of the trading name, existing contracts with clients, and use of any equipment that might have been passed on.
Personally I wouldn't take over a business that I had no history of, and potentially doesn't have any accounts.
You can't just assume she's self employed, and the business not having a bank account racks up the risks as well. Cash businesses are a favourite target of HMRC! I can't believe that it has nothing that needs to be paid through a bank. Do you mind if I ask what the business is?
James says there would be paperwork if this was a Ltd Co, which there would be unless of course the transfer hasn't been done properly, but then I would also expect to see some sort of business transfer agreement for a sole trader business, to agree the transfer of trading name, customers, etc etc. Can she not clarify any of this with the previous owner, or the previous owners accountant?
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Jenny
Responses are my opinion based on the information provided. All information should be thoroughly checked before being relied on.
The business is a small place serving breakfast and lunch. Not registered for VAT. They don't do invoices. Just making and selling sandwiches. They were doing the business with the person who 'cleared off' and left everything as it was.
No paperwork left on the premises that gives any clues? Business name on the rent or rates or letters from HMRC?
By the sounds of it I'm going to put my money on it being a sole tradership, in which case your client will need to register as self employed from the date she took over, and then you can maintain the dates from then for her self assessment. However, as a disclaimer, this is my guess and not necessarily the case.
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Jenny
Responses are my opinion based on the information provided. All information should be thoroughly checked before being relied on.
