Our latest guest blog, written by fellow mumbler and legal-whiz, Helen Dhalla gives all you mumpreneurs valuable advice on how to get started in business….
Starting Your Own Business
“The critical ingredient is getting off your butt and doing something. It’s as simple as that. A lot of people have ideas, but there are few who decide to do something about them now. Not tomorrow. Not next week. But today. The true entrepreneur is a doer, not a dreamer.” Nolan Bushnell (American Entrepreneur)
So, you’ve got the business idea, what do you do now? Budding Mumbler entrepreneurs, start making notes…
The first step is to consider how you are going to operate your business. Three common routes are:
Sole Trader
If you decide to work for yourself, contact HMRC and let them know about your business. They will send you the relevant forms to complete. You will need to pay self-employed National Insurance Contributions and every year, you will need to complete a self-assessment tax return. Bear in mind that if you’re a sole trader and your business fails, you will be personally liable for its debts.
Limited Company
The main advantage of setting up a limited company is that it limits your liability. If you are contracting with a supplier, for example, and something goes wrong, that supplier will seek action against your company and not against you personally.
It is relatively straightforward to set up a company at Companies House. There are a few forms to fill in and there are a couple of issues to consider, such as who will be the director/s and shareholder/s of the company. There are certain rules, regulations and duties that a company and its directors have to comply with so seeking early legal assistance is advisable.
Every company has to file an Annual Return and accounts with Companies House. In addition, Companies House has to be kept updated of any changes the company makes, such as changing the company’s registered address.
You can start your business via a limited company from the outset if you wish. Or, if you start as a sole trader, you can transfer to a limited company once the business is expanding or is becoming more profitable. Once your business is achieving a certain level of profits, there are tax advantages to forming a company. An accountant will be able to advise you on the tax advantages of using a limited company.
Partnership
If you are working with another person, you can form a partnership. Although a partnership doesn’t need to be registered, it is essential that the relationship is governed in some way. A Partnership Agreement is highly recommended. This agreement will set out what each partner is entitled to and what happens in the event of a dispute or break down in the partnership. Beware, even if you are close friends now, once money is involved, there’s always the potential for a falling out…! Protect yourself from the outset, prepare for every eventuality. You should note that a partnership does not offer limited liability in the same way that a company does.
STRAIGHT TALKING LAW
If you are about to embark on the exciting journey of setting up your own business, contact Helen at Straight Talking Law. Straight Talking Law is a fresh & modern new concept for providing local businesses and new business start-ups with legal advice and assistance at competitive fixed fees. Visit STL’s website at www.straighttalkinglaw.co.uk and follow Helen on twitter @talkinglaw to receive further legal updates. Setting up your business doesn’t need to be scary!
