Need advice with starting a business

[rjonker]

Hi Everyone,

I'm in the process of starting a part time business. I finally decided to start as a sole trader (seems to be the easiest way). That's about as far as I got with my decisions.

I'm not exactly sure how to set up as a sole trader, so was hoping someone can give me a step by step plan on process of setting up a buiness.

*Where and what do I need to register (national business register? companies house? HMRC?, business name, etc.)

I've read so many things and I'm either very confused now or I have no idea...

Any information will be welcomed!

Thank you in advance for your help.

 

[Paul_Rosser]

This site explains what steps you need to take - https://www.gov.uk/set-up-sole-trader

However be aware that as a sole trader you and the business are the same thing, so if something goes wrong you are left with any debt the business owes.

The reason most people go for a limited company is that apart from any debt which they have personally secured, then if the company owes debt they can fold the company and not owe anything. Also depending on turnover it can be more cost effective to go limited as you can then take dividends rather than salary which have less tax on them.

 

[rjonker]

Thanks for advice. I'll look into a limited company then. Hopefully things will start to make sense soon.

 

[Paul_Rosser]

If it's only going to be part time then starting as a sole trader may be a quicker (and cheaper) option, you can always convert to a limited company if things go well.

 

[rjonker]

I've been thinking about limited companies and maybe I should investigate it a bit more. Can anyone give me more info on setting up a limited company.

 

[Paul_Rosser]

Well you need to file the correct paperwork with companies house and then once a year fill in a tax return both for you personally and the business.

I would speak to an accountant if I was you as they will be able to advise you on what records you need to keep, how to take money out of the business etc.

 

[zanygame]

I wouldn't bother at the start.
Until you have built up a credit history, you will be asked to give personal guarantees for almost everything you do anyway.
Rent, Overdraft facilities, Credit cards Etc.

What business are you setting up in?

 

[rjonker]

Thanks for all the replies.
What would you not bother with at the start, if I may ask?
I'm planning a supplements business from home with the view of expanding it in future. But to start of with I 'm just focusing on one or two products.

 

[inbound interactive]

I got a good accountant and he just set everything up for me. Limited company probably won't be worth it at this stage

Good luck

 

[Alan]

I'm planning a supplements business from home with the view of expanding it in future.

Generally the decision to use a limited company comes down to risk.

With a limited company you are protected for unknown financial risks.

So it is your decision. If you are going to be manufacturing the supplements you could be in for some pretty hefty risks if something goes wrong with your product and you poison loads of people, of course you would have product liability insurance but insurance don't always pay out, meanwhile you loose your whole life savings.

On the other hand, if you are just retailing pre-packed products from a main stream UK based producer then you might think your risks are much lower and you may feel that your liability insurances may be OK.

here is a useful guide http://www.simplybusiness.co.uk/knowledge/guides/business-startup-guide/how-to-structure-your-business/

 

[zanygame]

What would you not bother with at the start, if I may ask?

I was referring to going Ltd. Most people do this to mitigate their financial risk, but as I say most suppliers etc will want personal guarantees anyway.

Good luck with your business venture. It can be a lot of fun

 

[Ozzy]

Just a quick point, you mention doing this on the side so I assume you may have a current job?

If you do then doing this on the side as a sole trader could have tax implications on your current salary. Doing it as a Limited Company won't affect your existing salary if you don't draw anything out the company. As already suggested it would be worth running the options past an accountant.

 

[Jet Virtual]

Hi Everyone,

I'm in the process of starting a part time business. I finally decided to start as a sole trader (seems to be the easiest way). That's about as far as I got with my decisions.

I'm not exactly sure how to set up as a sole trader, so was hoping someone can give me a step by step plan on process of setting up a buiness.

*Where and what do I need to register (national business register? companies house? HMRC?, business name, etc.)

I've read so many things and I'm either very confused now or I have no idea...

Any information will be welcomed!

Thank you in advance for your help.

Call up your local accountant and ask him all the questions you have. They will be more than happy to help since you will be needing their services.

 

[Manishp100]

HMRC website mate.. register from there. if you need a business bamnk account go to your bank and set that up. but you need to thgink of a name for the business and know what business you want to go into