UK business
startup resources

The government will help
your own business get started
It has often been said that Britain
is a nation of small shopkeepers, the entrepreneurial spirit is
alive and well in the army of self employed business owners in
the UK.
Start with your idea for your own business,
form a business plan, make it viable, then seek an accountant.
The following link will give you access to vital government
information. Bear in mind tax breaks, guaranteed small business
loans, regional incentives, small business training and don't
forget the local chamber of commerce, great for networking.
This business website is the government
information library to all things needed to set up your own
business, the advice is up to date and relevant, there are some
great tools there too. Your tax returns can now be filed online
and all relevant links can be found on these pages.
Sole trader or
Limited Company formation?
At the early stages of starting your own business,
during planning and preparation, you are faced with the
choice of opting for operating as a sole trader or forming a
limited company. They both have advantages and drawbacks, it
is your responsibility to use due diligence when deciding
which way to go. You should seek the advice of a
professional for your UK business startup, but here are some
pointers.
Sole trader, or self employed.
If you want to test the business market and
operate as a self employed, one man band, with average
earnings, then sole trading is a good start, not forgetting
that you can always convert to a limited company in the
future. There is less paperwork involved, your annual
returns do not need to be filed at companies house and made
public. 
You must first register with the inland revenue,
guidance is seen here inland revenue. Make sure that you
register before you trade because the revenue will impose
financial penalties for late filing. If your turnover takes
you above the threshold then you must also register for
VAT.
A sole trader, or sole proprietor means that your
business is just an extension of yourself, you can have a
business name, although this could lead to potential
problems, so your own name may be more suitable.
All your business taxes are payable personally, by
you. All the after tax profits are yours and all the losses.
If your business ever appeared in the courts then you are
personally liable for any damages, there is no distinction
between the business and you. You remain liable for any
losses.
You can file your own taxes, with software like
sage, it is very easy to conduct your own accounting,
although many people use the professional services of an
accountant and they can be found online, but a personal
recommendation is worth its weight in gold.
Your business is always considered second class in
the business world, for some strange reason, banks and
companies prefer to trade with Ltd companies, even though
there is usually less owner / risk ratio.
There are some very successful sole traders
operating in Britain, these people are happy to continue
without double taxation, shareholders, audited accounting
and companies house, which leads us to the next subject;
UK business startup as a Limited
company?
This is the vehicle for the serious business
person in the UK.
When you form a Limited company, or Ltd, a new
legal identity is formed, almost like a birth. Your company
has stand alone status, it is a separate legal entity and is
owned by its shareholders. The limited part of the name
means that the debts of the company are limited to the
company and not to the shareholders. The main structure of
taxes levied on the company are by corporation tax.
Shareholders can be private individuals, or other
companies, each company must have at least one director and
a company secretary. Even as a director, you are an employee
of the company, and any salary you pay yourself is subject
to paye. If a profit is declared then you can pay dividends
to the shareholders and these are subject to a different
class of corporation tax.
Things are very formal with companies and you
would be expected to have board meetings.
If you want to float the company on the stock
market, then you must register for a public limited company,
or PLC. A PLC must have two directors and £50,000 of issued
shares to start trading.
Accounts must be audited by an accountant and all
accounts must be filed with Companies House these are then published
and anyone that pays the small fee can gain a copy of your
companies full accounts.
The advantages can be taxation
based they can also based on the ability to raise capital
by issuing shares, one of the greatest advantages is the
ability to sell your company, or sell a part of it, by
shares. banks and investment angels look very favourably
toward Ltd companies, because of their accounting
structure and the commitment of the directors.
Limited companies can now be incorporated online they offer a
range of quick and easy options.
More UK business startup resources can be
found on Google.

|