a bank account was opened for a self employed business. Currently waiting to get bank cards etc so no transactions have been put through as yet.
Now person has decided to trade as a limited company instead and has registered the company.
Can he still use the bank account opened for the 'self employed' business for the new limited company?? He just wants a simple current account.
Does the bank really care what you do with the bank account once opened and would there be any significant implications with HMRC later if this is done?
Needs to get an account set up in the limited company's name.
As the limited company is a totally separate legal person to the individual running the business.
It is like you running your business but putting all the transactions through my bank account, so you can see it can get messy.
Potentially could be overdrawn loan account issues, benefit in kind issues, etc if not sorted out properly.
Do the easy and proper thing and advise your client to set up an account in the limited company's name, this can be a simple current account and depending on their bankers can be set up the same day.
As I understand it, if the bank account is in the individuals name, then all the company money paid in and out would go through the directors loan account, which could result in it being potentially overdrawn... so I would personally say its best to have a business account... looks better too!
