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When is a business not a business?

When is a business not a business?

Postby shootist » Thu Jan 18, 2018 7:04 pm

OK, I realise that general enquiries are vague and difficult to assess, but having just spent an hour and a half on the phone with my bank, time that I might more usefully have spend talking to any convenient brick wall. Accordingly, some help would be much appreciated.

A company limited by guarantee was set up with the sole purpose, defined within it's constitution, of acquiring and retaining shares in a particular plot of land, to be used by a sports club. Any profit for directors or members is specifically prohibited in the company constitution. Because some initial costs were incurred, mainly the setting up of the company, it was thought necessary to have a bank account. A business account was sought and opened with a bank, on the assumption that because the account was in the name of a limited company, a business account would be required. Now, the 'free' banking period has expired and moderate bank charges are being incurred. Looking around for alternatives, one banking advisor asked the question "Why do you need a business account if you're not trading?" A bit of a light went on because in fact the last company accounts were submitted to Companies House as a dormant company.

My hope is that a Club type account could be opened which if kept in credit would not incur any bank charges. The nearest reference to this on the inappropriately named bank 'help line' was that Companies house might require a 'business account' for submission of accounts. It is, in my belief at least, that the company is not a business and never will be. It cannot, by it's constitution, trade, in what I understand the word to mean. The bank charges are meagre, £5 a month (so far) but in relative terms it needs to be mitigated if possible. Anybody got any good ideas on resolving this problem? It's clear that the bloody bank has none.
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Re: When is a business not a business?

Postby Smouldering Stoat » Thu Jan 18, 2018 7:54 pm

My wife was a Director of a Company Limited by Guarantee until recently and the company had free banking of the club or small charity kind. I don't believe that Companies House give a monkeys either way.

Take your business elsewhere.
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Re: When is a business not a business?

Postby atticus » Thu Jan 18, 2018 9:14 pm

That is pretty much what I was going to say.
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Re: When is a business not a business?

Postby shootist » Thu Jan 18, 2018 9:53 pm

Thanks for that. It's pretty much what I thought but after 90+ minutes of mainly listening to hold music interrupted by apologies on not being able to find the right adviser, my brain was more scrambled than usual.
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Re: When is a business not a business?

Postby diy » Fri Jan 19, 2018 3:31 pm

My suggestions are not legal advice
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Re: When is a business not a business?

Postby atticus » Fri Jan 19, 2018 3:44 pm

Good link! Shooter's group should read it.
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Re: When is a business not a business?

Postby shootist » Sun Jan 21, 2018 8:48 am

Thanks again. Looks like Monday is going to be spent getting the phone warm.
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Re: When is a business not a business?

Postby dls » Sun Jan 21, 2018 9:11 pm

For this context,a business means only and exactly what the bank defines for this purpose.

Seek a bank with a better definition if necessary.
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