Okay, so you've got your product in one hand, you have a handful of leaflets left in another (the ones which you decided not to post through private front doors - remember the old intrusive lesson from yesterday?) and now you need to find a title to describe yourself.
Now, bearing in mind that you are starting with no money in the kitty what so ever - after all, if this wasn't the case and we had a nifty 10K sitting behind our backs, then we wouldn't be playing fair to our readers, so you now need to see how and where you can fit into the grand scheme we call the Tax game.
Lone Ranger
If you are sitting at your desk with no one else in the house helping you run the business/do the producing/make the tea/feed the cat during office hours/be the secretary, then you can safely bet that you are a sole trader. Now, here is the crucial bit - if, in that case, you want to trade as a sole trader, and you can do, even if you have less than 50 employees working for you, you don't need to produce any accounts for the firm, any other official documents stating the financial capacity for the company at Companies House. The next good thing that if your company is small and you intend to keep it that way, you can get away with not registering for VAT (although you must keep your business income lower than 54K a year) However, and here comes the important bit before you jump for joy, swear blind you'll never possibly earn that much and book your next holiday - IF, and there is a big IF, your business folds sensationally, as part of the Bankruptcy Acts (and yes, that B word had to mentioned, so let's please try to avoid it) the bank, can look at all your personal assets as a part of the big payback. So, being a sole trader might mean you are, to a point, unanswerable to some authorities, it does mean that there is no separation between you as a person and your business, although it does still stand as an asset, it's just that when it comes to the crunch, you may have to go down with the ship.... that little nugget is just worth bearing in mind for the future, but isn't not going to happen is it?
Simply follow this exercise for me, sit with straight backs in your chairs and very gently shake you head from side to side.... keep doing that on short occasions, keep up the marketing plan and you shouldn't go too wrong....
That leads us very neatly towards the next bit (don't worry, I shan't keep you too long today, as I can see a few yawns at the back there, but this is the important stuff and it does need to be discussed...)
Hand In Hand
If you fancy the idea of a Partnership, well then you have to ask each other a few very painful questions on the outset - it is worth doing this as a good solicitor will ask you exactly the same thing when you are sitting in front of him about to sign your life away so make sure of the following:
Remember these words: Trust. Equality (and by that, I mean that both parties need to contribute equal amounts with regard to capital.) Share (you win some, you lose some) and Say, again - this means equal say.
In a nutshell, it is everything down the middle. What you must agree on is that you won't draw a salary or interest on the money you have invested in the business individually. But, don't panic here, an agreement is an agreement and what ever you decide to sign with your partner or partners, should be stuck to - no matter what happens. If there is any doubt about your partner, (think of it like a marriage) think again about going in to business - it would be a lot less stressful on your Tod.
Limited By Name...
Probably one of the best solutions to a lot of companies still giving a certain amount of freedom for the future is to be a Limited Company - by this, the meaning is fairly simple: for a start if the ship sinks, your personal assets will remain in tact and the claimers will only take what needs to be paid back from your business. Shareholders remain untouched, if their shares are lower than the claims. This is good news if the director is also a shareholder in the company. You can also sell your shares as a way of raising funds to keep your business going.
However, and here comes the downside: There are some legal boxes that need to be ticked first before you can plunge into the world of being a Ltd. Your will need to arm yourself with a chartered accountant, especially if your profits from the firm are going to be big. As a Ltd, you can be governed by a selection of laws and rules through the Companies Act. Your shareholders can ask for the accounts to be audited if their shares are 10% or more of the business and the whole process of becoming a Ltd is expensive on the outset and does not happen overnight. If you have a few hundred quid lying around and a couple for months to kill, then it might be just the step for you, particularly if the company is going to grow with regard to it's profits. Any worries, night sweats and small fevers at the mere mention of the word finance, can be soothed by visiting the following... www.businesslink.gov.uk they are the first stop, one shop for most business ventures, just like mine. They are a wealth of information and advice and are a must for anyone wishing to join the small business game. If you want to find out more about the different types of company you can set up and their differences, then go to www.companieshouse.gov.uk, again, you will find all you need about who, where and why you should call your company which ever suits you best....
Now go and put the kettle on and here endeth the lesson for today....
onemum2009
Now, bearing in mind that you are starting with no money in the kitty what so ever - after all, if this wasn't the case and we had a nifty 10K sitting behind our backs, then we wouldn't be playing fair to our readers, so you now need to see how and where you can fit into the grand scheme we call the Tax game.
Lone Ranger
If you are sitting at your desk with no one else in the house helping you run the business/do the producing/make the tea/feed the cat during office hours/be the secretary, then you can safely bet that you are a sole trader. Now, here is the crucial bit - if, in that case, you want to trade as a sole trader, and you can do, even if you have less than 50 employees working for you, you don't need to produce any accounts for the firm, any other official documents stating the financial capacity for the company at Companies House. The next good thing that if your company is small and you intend to keep it that way, you can get away with not registering for VAT (although you must keep your business income lower than 54K a year) However, and here comes the important bit before you jump for joy, swear blind you'll never possibly earn that much and book your next holiday - IF, and there is a big IF, your business folds sensationally, as part of the Bankruptcy Acts (and yes, that B word had to mentioned, so let's please try to avoid it) the bank, can look at all your personal assets as a part of the big payback. So, being a sole trader might mean you are, to a point, unanswerable to some authorities, it does mean that there is no separation between you as a person and your business, although it does still stand as an asset, it's just that when it comes to the crunch, you may have to go down with the ship.... that little nugget is just worth bearing in mind for the future, but isn't not going to happen is it?
Simply follow this exercise for me, sit with straight backs in your chairs and very gently shake you head from side to side.... keep doing that on short occasions, keep up the marketing plan and you shouldn't go too wrong....
That leads us very neatly towards the next bit (don't worry, I shan't keep you too long today, as I can see a few yawns at the back there, but this is the important stuff and it does need to be discussed...)
Hand In Hand
If you fancy the idea of a Partnership, well then you have to ask each other a few very painful questions on the outset - it is worth doing this as a good solicitor will ask you exactly the same thing when you are sitting in front of him about to sign your life away so make sure of the following:
Remember these words: Trust. Equality (and by that, I mean that both parties need to contribute equal amounts with regard to capital.) Share (you win some, you lose some) and Say, again - this means equal say.
In a nutshell, it is everything down the middle. What you must agree on is that you won't draw a salary or interest on the money you have invested in the business individually. But, don't panic here, an agreement is an agreement and what ever you decide to sign with your partner or partners, should be stuck to - no matter what happens. If there is any doubt about your partner, (think of it like a marriage) think again about going in to business - it would be a lot less stressful on your Tod.
Limited By Name...
Probably one of the best solutions to a lot of companies still giving a certain amount of freedom for the future is to be a Limited Company - by this, the meaning is fairly simple: for a start if the ship sinks, your personal assets will remain in tact and the claimers will only take what needs to be paid back from your business. Shareholders remain untouched, if their shares are lower than the claims. This is good news if the director is also a shareholder in the company. You can also sell your shares as a way of raising funds to keep your business going.
However, and here comes the downside: There are some legal boxes that need to be ticked first before you can plunge into the world of being a Ltd. Your will need to arm yourself with a chartered accountant, especially if your profits from the firm are going to be big. As a Ltd, you can be governed by a selection of laws and rules through the Companies Act. Your shareholders can ask for the accounts to be audited if their shares are 10% or more of the business and the whole process of becoming a Ltd is expensive on the outset and does not happen overnight. If you have a few hundred quid lying around and a couple for months to kill, then it might be just the step for you, particularly if the company is going to grow with regard to it's profits. Any worries, night sweats and small fevers at the mere mention of the word finance, can be soothed by visiting the following... www.businesslink.gov.uk they are the first stop, one shop for most business ventures, just like mine. They are a wealth of information and advice and are a must for anyone wishing to join the small business game. If you want to find out more about the different types of company you can set up and their differences, then go to www.companieshouse.gov.uk, again, you will find all you need about who, where and why you should call your company which ever suits you best....
Now go and put the kettle on and here endeth the lesson for today....
onemum2009
