Online Business Startup whilst working full time.

[rrp]

Hi All,

I am looking into starting a online business (Limited Liability Partnership) with a family member but have a concern regarding my Full time employment contract.

I wish to continue working full time in my current employment until my business grows to a point where I can leave and work entirely for myself.

My current contract states that I cannot have another job whilst employed.

It is also rumoured that if I do start my own business then it could become the properrty of my current employer if found out!

Is there anyway around this? In reality, could my current employer take possession of my new business? Surely my other business partner could stop this from happening?

I'm at the stage where we are ready to register the company but this is holding us back at the moment! Also, will my current employer find out via tax office etc if I become self employed (will they get notified about anything as I am employed by them?)

Hope you can help

rrp.

[Jayne]

Hi,

If your trust your partner, set the whole lot up in there name. Then when you pack in your job, make it a partnership. But if you take a wage (Drawnings) out of this new busines, this could also go aganist your contract, so you would have to work for free until you packed in your job.

Jayne :D

[Stephen]

If you don't make your employer aware of your business, you could be in breach of contract.

You have a responsibility to your employer to be able to undertake your role fully. It could be viewed that your secondary role adversely affects your employment (a example being working hours and the working time directive).

There's also the possibility of a conflict arising in such situations which your employer may be concerned about.

You may wish to consider discussing the matter with your employer to see what their thoughts are. Be aware though that there is a strong possibility they won't like it.

[Astaroth]

I know with my own contract of employment that any ideas I generate whilst in their employement/ projects completed etc are the possession of the company. Likewise I have an anti-competition clause preventing me working for another financial services company whilst employed or for the 12 months after the end of my contract.

My legal experience is not in this area but I cannot see how they could claim ownership of your company, particularly if it is a limited company (rather than a limited partnership - not sure why you are going for this option esp as at least one partner has to be unlimited) as it is a legal entity in its own right. The only real issue would be if your business is in competition to your employers or if you take an idea from work and turn it into a business.

To be on the safe side you should discuss it with your line manager but some may be concerned this could threaten future promotions/ assignments etc

[rrp]

Thanks for the replies!

To answer some one of the questions, this new business has nothing to do with the line of business I currently work in...

I see what you are saying with my employer taking offence as I could be seen to be working on my own business during their time (Surely they would have to prove this though?) Could I argue that my business partner is doing the work in the day and I am taking over in the evening?

I don't think discussing this with my boss would be a good move. I don't think she would like it one bit!

Just out of interest, how could my boss find out (unless I tell her)....

Hopefully it would only be for a short while until the business kicked off and then I would leave anyway!

Thanks again for all your help and comments...

[Alpha]

RRP

Firstly please ignore the whole of Jaynes posting. You may trust your partner explicitly now but you cannot guarantee that in the future!.

Secondly

There is a small chance that the company could find out that you are running a business. People do talk!! The fact that you would be forming a limited liability partnership means that your details would be available on companies house should anyone wish to go looking for you but this is a remote possibility.

Thirdly

Your contract of employment presumably is explicitly forbidding you to have other employment so you would be committing a fundamental breach of this contract which would mean that they could terminate your contract. (Whether the contract terms are actually fair I will leave to the very capable legal people on the forum)

I would imagine that the company policy has been set and it would probably not be beneficial for you to discuss it with your boss (or anyone else at work).

You are I think, left with taking a chance and if discovered arguing that the partnership has been set up with you providing finance but not working in it (reasonable explanation)


Finally

when you set up the LLP please make sure that you also get a partnership agreement put in place for your(and your partners) peace of mind.

[rrp]

Thanks Alan, very wise words there!

And all these ads on TV saying "Its easy to setup your own business!" Yeah Right... ha ha

rrp

[rrp]

One thought I've just had..

What about using my Father as one of the partners (instead of me)?

When things take off, could I get it changed?

I suppose it could be a bit of a pain though with regards to setting up business accounts etc as he would have to attend?

perhaps I should crap that idea!

[MinuWeb]

Does your contract forbid you from being a shareholder ? I cannot see how they could claim any shares you own being theirs.

Therefore, setup a company with other people as MD and secretary and you a mere shareholder.

[Alpha]

Sorry

I missed replying to that final point.

There is no legal way that your employers would be able to take over your business without you selling it to them.

They can however take legal action to stop you from competing with them this is part of your contractual terms.

There is also no real need to be a limited company if you believe that the LLP is the right vehicle for you to trade under. The argument I outlined would be the same as being a shareholder in the limited company.

[Jayne]

[quote="Alpha"]RRP

Firstly please ignore the whole of Jaynes posting. You may trust your partner explicitly now but you cannot guarantee that in the future!.



What have I said wrong now? I set up out second business in my name, then later on, had my partner (my husband / family) join me as a partner later. Some people you know you can trust, so what was wrong in me posting that?

Jayne

[DuaneJackson]

Don't take it personally Jayne!

Alpha is saying that although you may trust someone now. You don't know what the future holds. Wise words I think when it comes to dealing with something that is potentially worth miliions of pounds in the future.

[Jayne]

Well he should put a smilie face on the end, so i'd now he wasn't being mean....like this :D

Jayne

[DuaneJackson]

He's an accountant, they don't do smileys and they are paid to be mean :p

[Jayne]

My accountant is lovely, he'd use smilie faces. :D

Jayne

[Alpha]

Jayne

because offering advice like that no matter how well meaning the person is could have very expensive consequences and so how can I put a smiley against the warning. (Just think of everyone who you know who has been divorced!!! I'm sure they always intended to be together forever)


Nothing personal against you just the seriousness of the advice.


:D :D :D :D :D :D :D :D :D :D :D :D :D :D :D :D :D

[Jayne]

Guess i'm too trusting.

Friends again then :D :D :D :D :D :D

Jayne

[BMS]

Are you acting as a PR officer for your accountant Jayne.

Alpha is spot on, with all the goodwill in the world you may be best mates with your partner now but how may posts have we seen on this forum asking questions about the dissolution of partnerships or how to get rid of a Director or shareholder.

RRP, if you set the company up with your father as a Director he could resign and you become a Director at a later stage.

[Jayne]

Hi BMS,

PR people get paid :D The forum is to help businesses I thought, so that's what i'm doing. :D

Jayne

[rrp]

Are you acting as a PR officer for your accountant Jayne.

Alpha is spot on, with all the goodwill in the world you may be best mates with your partner now but how may posts have we seen on this forum asking questions about the dissolution of partnerships or how to get rid of a Director or shareholder.

RRP, if you set the company up with your father as a Director he could resign and you become a Director at a later stage.


If I did set my Father up as a partner (LLP structure) is this still true? Could he resign and I become a partner at a later date? Also how practical would it be? Would my father have to open bank accounts, send returns etc or could my other business partner do all this on the companies behalf?

Thanks for all the help... Really appreciated!

[Russ]

rrp

By forming a Ltd company you are not "going self employed" you become a share holder of the company. Correct me if i'm wrong please someone but you do not have to be an employee of that company to be a share holder. You can become an employee at a later date.

The area I think that will be of most concern to your current employer is any area where you directly compete with them and if you do they can and most probably will make life very difficult for you. If they can claim direct IP over your business they will try.

In my experience the worst damage is done through defimation of character, if your employer wants to damage you or your reputation he will run you down to your clients.

Be lucky

Russ