tegwin
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| posted on 30/12/11 at 11:13 PM |
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Limited liability company, where to find advice!?
Some of you may know I have been working on a couple of personal projects which are slowly turning into something that is a marketable product. I have
a joint patent application in for part of it.
The circumstances around the product and its potential customers are not "standard" or "clear-cut".
I am at the stage where I am starting to get a fair few bits manufactured and assembled to meet some 'test' orders from intereted clients.
I am now reasonably confident that, provided I can get the last few bits perfected, I will have a few sales. Not going to make me wealthy, but would
be nice to make some pocket money from my efforts :-)
I am not sure if I should just remain an individual, register as a sole trader, or setup a limited liability company. Not sure how to handle the tax
etc or which paperwork to fill in etc.... I learn quickly, but I have no experience in this field.
Is there anywhere that offers impartial (and free) advice on this sort of thing!? I dont want to approach a bank or the like as they have a vested
interest in making money out of me.
For the time being the investment is my own, so no shareholders but it does mean that I dont have spare cash to pay huge sums of money for advise....
or food....
I like the idea of being an "official" company for the protection and the fact that it looks more proffesional to clients and suppliers.
But not sure the extra paperwork and hassle is worth it?!
I dont really want to go into specifics on an open forum, but if people have any information that might be useful, I would appreciate it. At a bit of
a loss as to where to go from here.
[Edited on 30/12/11 by tegwin]
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Would the last person who leaves the country please switch off the lights and close the door!
www.verticalhorizonsmedia.tv
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wylliezx9r
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| posted on 30/12/11 at 11:30 PM |
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I would talk to a good accountant.
I spent a lot of money on booze, birds and fast cars. The rest I just squandered.
George Best
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Dangle_kt
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| posted on 30/12/11 at 11:37 PM |
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Setting up a Ltd company doesn't limit your liability to use quote marks unfortunately 
Accountant is who you want to chat to, usually its for tax and to limit your risks as an individual if it all goes wrong, but it then limits your
ability to get loans (usually you have to at least match the investment with your own money)
You can can set yourself up, but do lots of readings, if you don't file your accounts with companies house etc. they can dissolve the company
taking the bank account with it (but not any debts...)
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JoelP
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| posted on 31/12/11 at 09:18 AM |
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Id say ltd is a good idea if you are making things, it doesnt need many to break before you are bankrupt from the costs of replacements or damages.
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T66
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| posted on 31/12/11 at 09:35 AM |
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Up on the tundra, we have a business startup support thing called Businesslink, government sponsored etc, you may have similar your way. This was run
on a workshop basis, over 3 or 4 sittings & free.
My son used them recently starting a business, however my other son is an accountant (training) and as suggested earlier, they may be best placed to
look after "your" interests.
Good luck.
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big-vee-twin
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| posted on 31/12/11 at 09:40 AM |
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Hi Tegwin, I set up my company 6 years ago, the one thing I did make sure of is that it looked professional and bigger than it actually is, i.e. made
it look attractive to potential customers without lying of course.
Initially I set up a company and registered it at companies house- we used an internet based service for this, there are plenty of firms out there
that offer this service. It costs around £160.00+vat to register a company and get a company number.
Have a look at business link website too.
Having a Ltd company means that you are an employee of the company and the company is responsible for its own debts etc i.e. the company is classed as
an entity - this will afford you most protection.
The next thing I did was register for VAT, I didn't need to as turn over hadn't gone over the VAT threshold but some companies will not
make payments to you if you do not have a vat number as they want to claim the vat back. This is done by filling in a couple of forms on the
Governments VAT web pages, take about two weeks and doesn't cost.
The we took out insurances for Public Liability, Employers liability and Professional Indemnity, you may need to consider product liability
insurance.
Once you have these three things in place you can start trading.
You then need to use the services of an accountant to do your books for tax purposes and general tax and financial advice.
Hope that helps a little.
Duratec Engine is fitted, MS2 Extra V3 is assembled and tested, engine running, car now built. IVA passed 26/02/2016
http://www.triangleltd.com
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mads
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| posted on 31/12/11 at 09:53 AM |
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U2U me if you want the name/number of my accountant - he is based in Malvern and his charges have always been reasonable.
We gain knowledge faster than we do wisdom!
Life is not a journey to the grave with the intention of arriving safely in a pretty and well-preserved body, but rather to skid in
sideways, thoroughly used, totally worn out and loudly proclaiming... "f*ck, what a trip!"
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plentywahalla
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| posted on 31/12/11 at 09:54 AM |
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Are you making something that could endanger the public? Having public liability insurance and product liability insurance is all good but insurance
companies are all the same and don't like paying out on big claims. Just a broken leg could bankrupt you
Limited Liability is a form of ultimate insurance for you personally.
Rules are for the guidance of wise men ... and the obedience of fools. (anon)
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designer
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| posted on 31/12/11 at 10:19 AM |
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You can buy a set up company off the shelf for peanuts and then trade under whatever name you want.
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big-vee-twin
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| posted on 31/12/11 at 10:42 AM |
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Quote: Are you making something that could endanger the public? Having public liability insurance and product liability insurance is all good but
insurance companies are all the same and don't like paying out on big claims.
Maybe very true, but if you want to trade with other companies, they will want you to have these types of insurances.
Duratec Engine is fitted, MS2 Extra V3 is assembled and tested, engine running, car now built. IVA passed 26/02/2016
http://www.triangleltd.com
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Brook_lands
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| posted on 31/12/11 at 12:30 PM |
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Business link shut their doors in Nov'11 but the website is still live and very good and informative.
A private limited liability company is easy and cheap to set up either direct with Companies House (£14) and from £30ish upwards for those that
provide off the shelf solutions.
A Private Limited company needs to submit an annual return and annual accounts but the accounts requirement for small companies are not too bad.
Should the worst happen your liability will be limited to the money you have in the company unless you have acted improperly as a director. If you
have not put up personal assets as surety for company loans then the company’s creditors cannot take your house, car, etc.
There can be tax advantages to operating through a Ltd company although this depends on personal circumstances.
If you think you might sell the business idea/product then this can be easier if it is in a company.
There has to be a clear distiction between what are personal assets and company assets.
If you need to raise money to finance the business you can do this by selling shares in the company to investors (but not the general public).
Shutting down a company is more complicated (and expensive) than ceasing as a sole trader or partnership.
As a sole trader and partnership, you are the business and the business is you, there is no separation between the two. Your personal assets are at
risk if it goes wrong. (There are limited liability partnerships but I doubt you will be going there.)
Paperwork is simpler although you will have to inform HMRC that you are operating as a sole trade/self employed and fill in a self assessment tax form
each year.
Either as a sole trader or company, if you need to borrow money at this early stage you will probably have to put up personal surety regardless.
Whatever you do choose to do get liability insurance and keep good records of money you spend and any income you receive it will make life easier in
the long run.
Remember if turnover/sales exceeds about £73,000 per year you have to be VAT registered.
Final piece of advice, watch cashflow like a hawk, failing to manage cashflow correctly can kill a good profitable business.
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plentywahalla
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| posted on 31/12/11 at 02:23 PM |
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quote:
Originally posted by big-vee-twin
Quote: Are you making something that could endanger the public? Having public liability insurance and product liability insurance is all good but
insurance companies are all the same and don't like paying out on big claims.
Maybe very true, but if you want to trade with other companies, they will want you to have these types of insurances.
I never suggested not having suitable insurance ... I just said that going Ltd is additional ultimate insurance for him personally.
Rules are for the guidance of wise men ... and the obedience of fools. (anon)
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Neville Jones
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| posted on 31/12/11 at 02:30 PM |
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Limited Company is easy to set up. Look for Jordans, in Bristol I think?
Don't get conned by accountants telling you that the accounts have to be done by a chartered accountant. Until you turn over >£2m, you can
do them yourself. The Companies House website has a lot of self help info in templates and examples. Same with tax. Some local colleges do courses
free for new startups as well, on how to manage accounts and sales and other necessaries.
VAT is a moot point, particularly with labour intensive products. Until you are turning over the limit, suffer the hit on materials, the paperwork
involved every month or quarter is just not worth the hassle. Also, the VAT man/inspector will maybe tell you lies. The interpretation of the rules by
one vat man, may contradict his next successor, resulting in a huge vat bill which you were previously told you didn't have to pay. I had a case
wherre the incoming inspector contradicted a letter with a written interpretation from his head office, no amount of appealing could make them change
his decision, whether he was right or not. The VAT Inspector is never wrong.
If you have a Patent you want to protect, at all costs, then get yourself a Guernsey company. No other offshore, MUST BE GUERNSEY. Sell the patent and
all rights to the island co. for £1, then whatever may happen to you in mainland UK, the patent can never end up as part of a court case. The island
company can also demand production licence payments, which are totally tax deductable, and sit tax free offshore for you to use when on holiday in
Bermuda or Mustique or any other foreign hot spot.  A nice way to keep big profits away from UK taxes, ask Richard Branson, or maybe a Principal of
a big London merchant bank with an island office.
All of the above is my personal experience, along with some very good advice from a couple of the most wealthy men in the world, and one or two I sail
with here.
Cheers,
Nev.
[Edited on 31/12/11 by Neville Jones]
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JoelP
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| posted on 31/12/11 at 02:59 PM |
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in addition to nevilles comments on offshore funds, you can get them loaded onto an international debit card for about a 2% fee and then spend it in
the UK anyway. Not terribly relevant to this thread, but a useful way to avoid/evade uk company tax. No idea which side of the law it falls on though!
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Simon
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| posted on 1/1/12 at 01:35 AM |
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quote:
Originally posted by big-vee-twin
Hi Tegwin, I set up my company 6 years ago, the one thing I did make sure of is that it looked professional and bigger than it actually is, i.e. made
it look attractive to potential customers without lying of course.
Slightly ot, but..
this reminds me of someone I once knew of. He was starting a printing firm and went to another big printers and recorded the sounds in there. When his
phone rang, he played the tape back. Must have worked cos he did quite well from what I gather.
ATB
Simon
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