Composite companies - Switching to a limited company.

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Why switch to a limited company?

If you are operating in a composite company but are intending to contract in the long term then it will probably be worth switching to a Limited Company instead. The main reasons for this are tax efficiency. As we mentioned above, the MSC Rules ensure that there is NO tax advantage to be gained from composite companies.

How to switch:

The process of switching from a composite company to a limited company is quite easy and probably much easier than you might imagine.

Firstly:

You will need to check to see if your composite company provider stipulates a minimum operating period or a notice period. Obviously you will not be able to leave your composite company without providing this notice or serving the minimum period.

Secondly:

You would need to arrange for your current contract to be transferred from your composite company to your limited company. To achieve this you will probably need the help of both your composite company provider and your agency. If it is not possible for you to transfer your contract, the best thing for you to do will be to wait for your current contract to expire and then to set the new contract up with your limited company rather than your composite company provider.

Thirdly:

On leaving the composite company, you just need to make sure you are paid the correct amount for the work you have done that is outstanding and for any holiday pay and/or sick pay and/or expenses. As the composite company company will still exist and will still go on serving other contractors after you leave, it will not be shut down or stuck off or dissolved so you should not incur any fees for this.

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Full index of pages:

Home Page IR35 Background - page 1 IR35 Background - page 2 IR35 Background - page 3

IR35 Rules - page 1 IR35 Rules - page 2 Beat IR35 - page 1 Beat IR35 - page 2

Beat IR35 - page 3 Beat IR35 - page 4 Ltd Company - page 1 Ltd Company - page 2

Ltd Company - page 3 Ltd Company - page 4 Umbrella Companies - page 1

Umbrella Companies - page 2 Composite Companies - page 1 Composite Companies - page 2

Composite Co - page 3 Composite Co - page 4 MSC - page 1 MSC - page 2 IR35 Insurance

IR35 Investigations - page 1 IR35 Investigations - page 2 Contracts - page 1

Contracts - page 2 Contracts - page 3 Resources 1 Resources 2 Resources 2 Sitemap