Investment Sole Trader

[noe000]

I am sole trader and value my business at £6000

My friend wants to invest £3000 into my business at a 5% stake of the business.

How can I do this as a sole trader and how much would it cost ?


Many Thanks

Sam

 

[elaine@cheapaccounting]

You would no longer be a sole trader but a partnership.

As s start I would suggest a partnership agreement.

Then you need to contact HMRC to tell them

 

[noe000]

I forgot to mention that my friend whats no say in the business or will not be working in the business but as a silent partner

Is this this still possible and what are his rights as a silent partner

Regards

Essam

 

[MyAccountantOnline]

A limited company might be an option??

What does you friend aim to receive for his investment?

Could you perhaps take the money as a loan instead?

Do you want to give away half of your business now?

Do you need to?

 

[JGOffshore]

I would think that you either set up a partnership or a Limited Liability Partnership which might suit you better than a normal partnership or limited company.

 

[noe000]

Does a limited company require any specific amount of money to setup, as someone told me that you need £50,000 minimum.

Is this correct do you have any good links to a Limited Liability Partnership

Will Limited Liability Partnership account for a 95/5 split


Thanks

 

[elaine@cheapaccounting]

Limited company can be set up with £1 share capital

No min. investment required

 

[noe000]

Do you have any more information regarding limited company as I would be interested in going down that route.

 

[PrestigeShopping]

http://www.bizhelp24.com/business-start-up/sole-trader-or-limited-company--2.html

That explains it nicely.

 

[JGOffshore]

Does a limited company require any specific amount of money to setup, as someone told me that you need £50,000 minimum.

Is this correct do you have any good links to a Limited Liability Partnership

Will Limited Liability Partnership account for a 95/5 split


Thanks

As Elaine has said, you can start a private limited company with just £1 paid up capital. A private limited company is one with Limited or Ltd at the end of its name. If you want a 95/5 split you are probably best issuing 95 shares to yourself and 5 to the other guy.

Public Limited Companies - they have Plc at the end of their name - do need to have an authorised capital of at least £50,000 of which 25% has to be paid up.

A Limited Liability Partnership (LLP) can allow for 95/5 but it might be a bit more awkward. I'll try and post a link to more detailed info on LLPs later today.

 

[PrestigeShopping]

Im not lecturing you, but dont you think your ripping your friend off if you value your business at £6,000 and he is invested £3,000 for a mere 5%?

Or if that a typo?