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Other Creating a new company

Discussion in 'General' started by yakyb, 22 Nov 2010.

  1. yakyb

    yakyb i hate the person above me

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    anyone created a company before?

    I have been seriously considering a number of projects (Software Development) based around windows Phone 7 and some other technologies, that (would hopefully) turn a profit

    I have been over at company house looking at the company registration forms and considering starting one up (the name I want to use is available).

    what i'm not sure about are the pros and cons of creating and developing under a company name (as opposed to for myself)

    i.e.
    i understand there maybe some tax incentives but this may require the hiring of an accountant.

    also i will need to submit yearly accounts to the Taxman (again i'm not really sure of what is involved here) again may require an accountant although i'm sure i could do it (as numbers will not be that great)

    i'm aware it would be best to talk to a bank first but just wanted your input



    anyone tried this before, what thoughts did you have

    (plus it would be cool to be CEO of something)
     
    Last edited: 22 Nov 2010
  2. Modsbywoz

    Modsbywoz Well-Known Member

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    seriously, see an accountant, they will be able to guide you best. They know which forms etc you need and they can register the company for you. Ask if they know a book keeper and give them an email. Might cost a little but it gives you peace of mind your accounts are up to scratch if they decide they want to audit you.
     
  3. Ljs

    Ljs Well-Known Member

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    I have started a company before yes.

    I only did it as a Sole trader though and not limited to keep things cheap to see how they pan out. You can still give yourself a company name and all that jazz.

    There is a wealth of information on the internet about which is better for you.

    My father also started as a Sole trader but switched to Limited and hated the extra expenses incurred.

    You will definitely need an accountant as a Limited company but if you do your homework you could get away without one as a Sole trader. I do mine myself.

    You need to fill out forms at HMRC either route you go, as a Sole trader this is the only thing you really need to do to get started.

    As for banks, I would highly recommend Santander (as long as your main account isn't already with them as banks can play with your money if you have two accounts with them) as they charge pretty much no fees while other banks tend to want to charge you through the nose.
     
  4. yakyb

    yakyb i hate the person above me

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    thanks for the responses so far, yes i'm aware i will need to speak to an accountant but im asking hypothetically as to what i need to look out for, i.e

    what extra expenses were these? accountants bills?

    what benefits are there to running a company as opposed developing in my own time without a name?
    what i will be doing will be exactly the same, (working evenings and weekends) but do i get any benefit from doing so?

    for example i bought a £1200 Dev pc last year, i use it for nothing but work, would i have got tax relief on it?

    i will look it up but what is the difference between a sole trader and a limited company?

    http://www.bytestart.co.uk/content/19/19_1/what-is-a-sole-trader.shtml << useful link about sole trader
     
    Last edited: 22 Nov 2010
  5. Ljs

    Ljs Well-Known Member

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    Yes its best if you look it all up.

    Limited companies occur a lot more expenses and complications where as Sole traders are more straight forward. For example, you will pay more for accounting as limited (partly because of this) and you also have to pay tax twice effectively if I am correct (company tax then your salary tax). There is also a lot of strange bureaucracy as a limited company like, if you were to give yourself a pay rise for example, you would have to write a letter to yourself about this. It might all be a bit overkill for what you need.

    Don't get me wrong, it has benefits too. You need to do a bit of homework I think!

    As for the tax deductions, I'm not sure about a PC you bought last year. If you were to buy a PC this year though as either a Sole trader or Ltd, you can usually tax deduct the full amount under AIA, but there are of course rules around this.

    Tax deductions and so forth are a complicated matter so you will probably need to get advise from an accountant (tbh, just ask questions on accounting forums and there are always friendly accountants there willing to dish out answers!).

    Either way, you have a lot of reading to do but I'll try and help you out where I can...
     
  6. adam_bagpuss

    adam_bagpuss Have you tried turning it off/on ?

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    http://www.businesslink.gov.uk/bdotg/action/home

    this has all the info you need for starting up a company.

    personally id go down the sole trader router if your on your own and yes you do get tax relief for business assets etc even as a sole trader.

    i run my own PC building company which i started last year and ive done it as a sole trader etc.

    oo also as a small company that has less than £64000 turnover you dont have to be VAT registered either which makes things easier.

    also as a sole trader you can apply for National insurance exemption which companies have to pay regardless of wether they trade or not. i forget which class it is ? 2 or 4 i think.

    as a sole trader you will simply be taxed on your earnings in the normal way you do with an employer except you fill out the forms.
     
  7. yakyb

    yakyb i hate the person above me

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    (hadnt even thought of National Insurance)

    all interesting information thanks guys, will have a read over and see what is required,

    i suppose i would have to check this over with my full time employer also to see what provisions were needed from their end.
     
  8. adam_bagpuss

    adam_bagpuss Have you tried turning it off/on ?

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    from your employers end nothing you dont even have to inform them
     
  9. Ljs

    Ljs Well-Known Member

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    ...unless its in your contract. It certainly was at my last job.
     
  10. adam_bagpuss

    adam_bagpuss Have you tried turning it off/on ?

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    providing the job does not occur during office hours or conflict then you dont have to say or do anything as if you did that effectively means they have control over your free non-employed time
     
  11. Ljs

    Ljs Well-Known Member

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    Yeah, not sure what yakyb is doing now though.
     
  12. craigr1982

    craigr1982 New Member

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    I was given duff information when I started my company about 6 years ago and started as Limited Company. Cost me a fortune in TAX and accountants bills, so much so that I nearly went under (it wasn't a brilliant year), I changed to Sole Trader in year 3 and haven't looked back. Much easier to deal with and my fee's are about half what they were.

    But I still have an accountant :) best thing since sliced bread if you get the right one.
     
  13. Jumeira_Johnny

    Jumeira_Johnny 16032 - High plains drifter

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    It's not about controlling your non-employed time, it's about what you see and have access to while you are at work. Ex: If you have a real estate management company on the side, and work in IT, then there is no issue. But, if your side business is software for phones, then it could be that something walks out the door with you and enriches your side business. It could be in your head, inadvertent, or accidental. But your full time employer has every right to put a clause in a contract that limits or prevents you from opening a business along the same lines. Some companies, when you resign or open a business, immediately take your laptop and email privileges away, and escort you from the building; leaving it to HR to clean out your desk. In fact a lot of employment contracts even specify a time period after you leave the company in which you are not allowed to be employed by a competitor or even the same industry. It's common and totally legal.

    If the OP is thinking about opening a business and is an upstanding person, he's right to feel an obligation to mention it to his current employer. The last thing he needs is for it to get around the grapevine that he built his business on the sly, with the knowledge base and resources of another persons' company. And it does get around.
     
  14. Ljs

    Ljs Well-Known Member

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    Funny, both examples you mention have happened to me and my girlfriend.

    As soon as she handed in her resignation (upon finding a new job) she was asked to leave the building and put on gardening leave.

    I too was told to go home and put on gardening leave, but as to my contract could not officially start on my own for 12 months! I had made a website with just a portfolio to try and look for new employment in that time period and I got an email from my bosses solicitor asking me to take it down immediately as it was against my contract and if I didn't they would proceed with legal action.

    He was a complete douche though, which is mostly why I left. His company went into liquidation 6 months later anyway!
     
  15. adam_bagpuss

    adam_bagpuss Have you tried turning it off/on ?

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    think its a bit of a grey area but when you leave a company your contract is terminated and therefore you are no longer bound to it.

    unless you signed a seperate gagging/conflict of interest contract i dont think they could have done squat.
     

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