Opening a paint shop

[Dan1391]

Hello.

My fiancé and I are in the very early stages of opening a paint shop (for the trade & public) in an area where we've identified a gap in the market in a busy town.

We have both been in the industry for over 10 years & believe we have a strong business plan. We are close to obtaining a suitable premises.

The part we are really struggling with is Business registration & VAT registration. We haven't got a clue whether we should register as a partners, just myself as a sole trader (at first) or set us both up as directors as part of a ltd company. Trying to research online & going on the government website has confused us even more. (Just for info, it will just be myself and my fiancé working in the shop and we have no plans to employ any staff especially in the beginning)
As for VAT registration, is it correct that we will need a VAT number so we can charge VAT when selling products? If so, can we apply for this as soon as our business is registered?

Thanks for reading, & if anyone has opened a new shop in the UK recently then any other tips or advice would be greatly appreciated.

 

[fisicx]

You will need to be a registered business and you will need to register for VAT.

It’s an interesting business venture and hope it works out for you. I get all my paint and other decorating supplies from Brewers. I’m assuming you don’t have a local branch.

 

[japancool]

Whether you should be a limited company or not depends on many factors. It gives you credibility and the protection of limited liability, amongst other things - but the latter doesn't apply when you sign personal guarantees (e.g. on your shop lease).

If you employ your partner, you will have to register as an employer.

As to VAT, yes, you can apply yourself. Whether or not you do depends on how quickly you expect to breech the VAT threshhold and how much of your business is trade and how much is consumer.

 

[Socio South West]

If you are going to pursue trade accounts both as purchaser and as a seller - eg to local authorities - Company registration and VAT registration are likely to be at least expected.

Company registration gives you at least some personal protection in the event of the company failing, although if you borrow you will almost certainly be asked for Director's Guarentees.

The disadvantage of a new company is that many suppliers will be very nervous about dealing with you at first, so bend over backwards to show them that you are good and honorable.

It is clear from your post that you need to learn a bit more about the implications of Company Registration and VAT registration, and I strongly recommend you sit down with an accountant as part of your financial planning to get the necessary explanations.

 

[JEREMY HAWKE]

If you are going to pursue trade accounts both as purchaser and as a seller - eg to local authorities - Company registration and VAT registration are likely to be at least expected.

Company registration gives you at least some personal protection in the event of the company failing, although if you borrow you will almost certainly be asked for Director's Guarentees.

The disadvantage of a new company is that many suppliers will be very nervous about dealing with you at first, so bend over backwards to show them that you are good and honorable.

It is clear from your post that you need to learn a bit more about the implications of Company Registration and VAT registration, and I strongly recommend you sit down with an accountant as part of your financial planning to get the necessary explanations.

I see no harm is registering for vat and just starting off as a sole trader and if things go well incorporate the business

The idea of a limited company having the most credibility is the biggest myth in business I have ever heard
Lets remeber and for those that did not know.

Jeremy Hawke Couriers is a sole tradership registered to me
I wont give away our customer book but we are Couriers to
Cornwall County Council
Devon County Council
Wessex Water (Their preferred courier)
One of the large international banks based on Canary Warf
Plus many ,many more

Its not what you are its how you present and the service you give

 

[Socio South West]

I see your point of view @JEREMY HAWKE, but having been through incorporation from an existing partnership it is truly a pain in the backside administratively.

I am guessing you are a supplier to the councils listed of long standing, and probably before money laundering and other issues which have led to councils introducing these criteria were imposed?

 

[WaveJumper]

And for god's sake get proper legal advice before you sign anything

 

[JEREMY HAWKE]

I see your point of view @JEREMY HAWKE, but having been through incorporation from an existing partnership it is truly a pain in the backside administratively.

I am guessing you are a supplier to the councils listed of long standing, and probably before money laundering and other issues which have led to councils introducing these criteria were imposed?

I could walk into any business here in the UK today and do a deal with them and my sole tradership

I can promise you that if they want to work with you they will
All suppliers sign up forms have the boxes to tick to describe your business and they include sole tradership
Its a myth from the old days when hand shakes were your bond

 

[KM-Tiger]

but having been through incorporation from an existing partnership it is truly a pain in the backside administratively.

Was a while ago but it wasn't hard. We just transferred all assets and liabilities on the nominated day.

Yes a batch of form letters to suppliers, but they seemed more concerned as to whether we paid on time rather than exactly who was paying them.

 

[Paul Kelly ICHYB]

Whatever you do, make sure you have a partnership agreement and, if limited co, share holder agreement.

Plan for the worst, expect the best.