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Those with Limited Company status - have you had this problem?
Thread poster: xxxStrastran
xxxStrastran
France
Local time: 02:37
French to English
+ ...
Feb 7, 2009

Hi all

I am currently examining the possibility of moving to Ltd. company status and, though there have been threads on this topic on Proz in the past, none of them have gone into great detail.

What concerns me is the possibility of agencies/translators refusing to give work to a Ltd. company, even if my rates, professionalism, abilities and working practices will be exactly the same as they are now. I don't outsource at present, and becoming a Ltd. company will not change that fact.

I am fortunate to have plenty of work a couple of years into my translating/interpreting career, but have no direct clients. I wondered if those with Ltd. company status have any thoughts on these points?

Thanks in advance.

Kind regards

Patrick


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Ralf Lemster  Identity Verified
Germany
Local time: 02:37
English to German
+ ...
Never had any problem Feb 7, 2009

Hi Patrick,
I used to have a private limited company in the UK several years ago; I have run my translation business in the form of a German limited company (GmbH) for eleven years now. To my knowledge, I never had anyone reject an offer because of the legal form of my business.

HTH - best regards,
Ralf


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Astrid Elke Witte  Identity Verified
Germany
Local time: 02:37
Member (2002)
German to English
+ ...
You might not get work from individual translators Feb 7, 2009

I would not want to outsource to a limited company, but only to an individual freelancer. It would not be clear to me that the limited company was an individual, and I would therefore have confidentiality concerns, i.e. I would see the possibility of the work being outsourced further without my knowledge.

Astrid


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xxxStrastran
France
Local time: 02:37
French to English
+ ...
TOPIC STARTER
Thanks Feb 7, 2009

Thanks, Ralf and Astrid

Astrid, whilst I don't believe a Ltd. company is any more likely to outsource than a freelancer (I could in theory just as easily outsource now, if I wanted to), I do see your point that things aren't as clear when new contact is made.


[Edited at 2009-02-07 18:42 GMT]


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Kristina Kolic  Identity Verified
Croatia
Local time: 02:37
Member (2007)
English to Croatian
+ ...
Absolutely no difference Feb 7, 2009

I first started as a freelancer, and one year later, I established an Ltd. because I already had a solid client base and an Ltd. was a more favorable solution in terms of tax treatment and charges. This is, at least, the case in Croatia, which explains why many translators, although working alone and on their own, opt for an Ltd. instead of working as classical freelancers.

And I never experienced any client stopping or expressing the intention to stop working with me just because I had an Ltd. On the contrary, I even noticed that they started to take me more seriously, in the sense that I was truly dedicated to translation services on a full-time rather than a part-time basis (as many use to do in Croatia in order to make ends meet) and that I would not take an in-house job overnight because of cash flow problems and thus close my business and cease to provide translation services.

As regards outsourcing, although I do it on very seldom occasions only, I do not see a major problem here. Agencies are outsourcing every day without actually ever meeting the translator in person, who is working as either a freelancer or an Ltd., and confidentiality applies just the same, meaning that you will not outsource a job without the outsourcer’s knowledge and approval. What matters is that your profile or skills match the agency's requirements for a specific job.

What might be useful, in order to be perceived on ProZ as a translator owning a company rather than as a translation agency engaged primarily in outsourcing, i.e. in order to avoid any possible confusion, would be to keep your first name and last name as the username to be shown in your profile on ProZ, and to mention your company on the company tab. The only difference when quoting on jobs is that I quote as an individual translator but I state that payments will have to be effected to my corporate bank account.


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Tomás Cano Binder, CT  Identity Verified
Spain
Local time: 02:37
Member (2005)
English to Spanish
+ ...
No difference Feb 8, 2009

My partner and I had a Ltd. for 10 years. Now we are a CB, a kind of association of professionals. Being a company instead of an individual did not mean a difference in work or relationships with customers. Of course some new customers think that we are an agency (we don't outsource either) when they see our rates, but that's a very different story.

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JLLTranslation
United Kingdom
Local time: 01:37
French to English
+ ...
never had a problem Feb 16, 2009

I'm a Ltd just because I used to be an IT contractor so it made far more sense financially to be a Ltd at that point in time. I've just stayed like that on becoming a FL translator. I've never had any issues. If anything I would say it makes you look more professional?

What is the reasoning for you becoming a Ltd rather than self employed or one man band?

Jo


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Krys Williams  Identity Verified
United Kingdom
Local time: 01:37
Member (2003)
Polish to English
+ ...
Ltd purely for tax reasons Feb 17, 2009

I went the Ltd route because my accountant showed me that overall I could save myself several hundreds of pounds per year by doing so, while still being totally legal and above board. The boundary I won't cross is VAT registration, because to be VAT registered would cost me money rather than save it!

I have noticed no difference whatsoever in being Ltd in terms of workflow etc.


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Emma Gledhill
Local time: 02:37
German to English
+ ...
I may be thick but... Feb 18, 2009

The boundary I won't cross is VAT registration, because to be VAT registered would cost me money rather than save it!


I don't quite understand this statement? Since VAT is added to what you already charge it's never your money anyway, it just passes through your account en route to the VAT man. You can also claim back any input VAT. The only cost I can imagine is the extra work you might need your accountant to do to complete the VAT return, but if you have someone doing your accounts anyway, it should be a doddle and take them hardly any time


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Daina Jauntirans  Identity Verified
Local time: 19:37
German to English
+ ...
No difference Feb 18, 2009

I used to be a sole proprietor and now have an S-corp. (in the US) - I have not seen any difference in willingness to outsource to me, either by direct or agency clients.

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xxxNMR
France
Local time: 02:37
French to Dutch
+ ...
I encountered this problem once Feb 19, 2009

It was for the CNRS, the French scientific research institute. The person who called me asked for lots of information, and everything was fine, but when I informed her of my legal structure she refused to work with me, although I explained that I was a one-person company. I still don't know why, maybe she was afraid of a lack of confidentiality.

For Krys: I really don't understand the VAT argument, it is the contrary, not being registered for VAT costs you lots of money, because you cannot deduct the VAT on your purchases!


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Ana Kardum  Identity Verified
Croatia
Local time: 02:37
German to Croatian
+ ...
I do not think it matters at all Feb 24, 2009

I have also started as a freelancer (sole trader) in Croatia and I worked in this legal form for a few years. Now I have switched to an Ltd. and I do not see any problems with my clients. As I do not generally outsource work, it does not matter to them and it means a great lot to me as it is a step forward in my career.

My reasons for establishing an Ltd. have to do with taxation model and other fees (health care and pension), which tend to increase every year for those who opt to be sole traders. I also intend to pursue other business activities, such as training etc. In this sense, an Ltd. is definitely a better option as it makes you look more professional.

Also, once you have a good turnover and an established business, it is usually a smart move.


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