Starting out.

[Kaos]

Hey,

Originally I was going to register as self employed, but now me and a friend have decided to work together - just the two of us no-one else.

So this "partnership" needs to be registered how do i go about this?
Also the aim is to sell second hand/new spare parts do i need any form of insurance for this?

Is there anything else i should consider?

Many thanks
Steve

 

[MyAccountantOnline]

Hey,

Originally I was going to register as self employed, but now me and a friend have decided to work together - just the two of us no-one else.

So this "partnership" needs to be registered how do i go about this?
Also the aim is to sell second hand/new spare parts do i need any form of insurance for this?

Is there anything else i should consider?

Many thanks
Steve

You will still need to register as self employed with HM Revenue & Customs.

Their are so many matters you need to consider when setting up and I would strongly advise you to consider seeing an accountant.

I would also strongly advise you to get a solicitor to draw up a partnership agreement for you if you are certain a partnership is the best option for you. I have sadly seen many good friendships ruined when people have gone into business together and things havent worked out as expected.

 

[MyAccountantOnline]

Their is some general information on my website which may be helpful to you -

http://www.hjcca.co.uk/resources/business_zone/business_helpsheets/helpsheet.php?hsType=9

 

[BakerSN1]

You should give consideration to Public/Products liability at the very least.

This will provide protection against claims made against you for third party property damage or bodily injury, resulting from the negligent actions of you and your business partner or any of the products that you sell.

Things to consider, which will effect the cover available are;

Type of products being sold?
Proportion of used/second hand goods?
Where these goods are made/imported from?
Where you are selling these goods (i.e. UK/Europe only or USA as well)?
Are any of the goods saftey critical?

If you would like to discuss this further, PM me and I will have someone from the office give you a call, or put you in touch with a local broker.

 

[Simon-M]

I would also strongly advise you to get a solicitor to draw up a partnership agreement for you if you are certain a partnership is the best option for you. I have sadly seen many good friendships ruined when people have gone into business together and things havent worked out as expected.

Good advice.

 

[profitxchange]

Try and avoid a partnership but what ever you decide on make sure you have a parnership or shareholders agreement or similar which sets out how you deal with disagreements, disbanding the co, what authority you each have and what requires both of you to agree on. eg purchases over £???? commiting to contracts .......
All may seem well now but you will go thru rough patches and a set of rules will help.

 

[Kaos]

You will still need to register as self employed with HM Revenue & Customs.

Their are so many matters you need to consider when setting up and I would strongly advise you to consider seeing an accountant.

I would also strongly advise you to get a solicitor to draw up a partnership agreement for you if you are certain a partnership is the best option for you. I have sadly seen many good friendships ruined when people have gone into business together and things havent worked out as expected.

What would you suggest would be best with regards to "partnership" etc

You should give consideration to Public/Products liability at the very least.

This will provide protection against claims made against you for third party property damage or bodily injury, resulting from the negligent actions of you and your business partner or any of the products that you sell.

Things to consider, which will effect the cover available are;

Type of products being sold?
Proportion of used/second hand goods?
Where these goods are made/imported from?
Where you are selling these goods (i.e. UK/Europe only or USA as well)?
Are any of the goods saftey critical?

If you would like to discuss this further, PM me and I will have someone from the office give you a call, or put you in touch with a local broker.

Type of products being sold? Car parts
Proportion of used/second hand goods? 75% i would say
Where these goods are made/imported from? Come from uk based supplyer for instant UNIPART
Where you are selling these goods (i.e. UK/Europe only or USA as well)?UK only
Are any of the goods saftey critical? Safety critical? i assume would be things like brake pads etc?

Try and avoid a partnership but what ever you decide on make sure you have a parnership or shareholders agreement or similar which sets out how you deal with disagreements, disbanding the co, what authority you each have and what requires both of you to agree on. eg purchases over £???? commiting to contracts .......
All may seem well now but you will go thru rough patches and a set of rules will help.

rules sound fair enough - probably an idea to have them displayed where we end up working from?

 

[Chris Ashdown]

Are you distant selling i.e. selling to customers not on your premises like on the web, if so have a good read of the distant selling regulations

 

[computaguy]

Please think long and hard about partners. They can be a great asset. They can also be a HUGE liability. Protect yourself and treat any money you spend doing so as an insurance policy against a possibly unfortunate future.

 

[Dragon Media Group]

My thoughts regarding partnerships:

For a partnership to work it must be 50-50. If you are putting in 50%, that means you still have 50% in reserve - put that in too and get rid of the partner!

 

[BakerSN1]

For the insurance, I suggest you sit down with an insurance broker and talk through exactly what you are doing.

Where exactly in Somerset are you? We have an office in Shepton Mallet who should be able to sit down with you. I can let you have thier details if your in that area.

 

[Kaos]

Right so lately ive been thinking lots and reading lots. This is how its looking so far. Please forgive me for banging on, but its awkward stuff to get my head round.

Form a partnership - both register self employed, then to we tell some one we've become a partnership or do we just generaly work together?

The local council has the required forms for the Salvage license we require to be able to purchase/aquire salvagble vehicles to be broken for parts.

The plan with that license would be to get a car in and out in one day. so that would include getting the car to where it is to be striped filing/marking each part we are salvaging and then going straight round to the scrap metal yard and proceding to scrap it idealy( that might take time effectively what with paperwork and DVLA unless we effectively purchased the vehicle and then mark it as scrap on the paperwork when we aquire it.

Once we have the salvaged parts from the said vehicle we store them while having a computerised record of what we have then local garages or even your DIY'er can pop in and say i need a starter motor for a ford escort, gotta be cheap.

Now new a starter motors up in the £80 plus bracket for modern cars. So let say we have his starter motor avalible we sell it on for £30 (no vat) and give it a 2 week warrenty if its defective money back - items would be tested as they were removed from the vehicle anyway as im a trained mechanic myself.

Most people always want the cheapest option when it comes to car parts i know i do ( 2 starter motors brought for half the price of a new one!)

so there we've already made £30 profit on the car ( if it costs £0) factor in scrapping the car after we've removed salvagable parts that arround here £40 tops a car thats already £70 profit on a £0 car


Motor trade insurance is simple enough and considerably cheap.

we have a decent unit in mind and the rent is £60-£100 a month and that would come from our own pockets to start with - more so mine as i would be keeping at least one or two of my motors there so i could work on them in my spare times ( eg: in the evenings)

Another thing that is causing me a bit of ache is the registering self employed while still working full time.

When self employed its all class 2 but does that class 2 cover my wages from the other job or is tha still taxed etc as per normal and class 2 only covers what ever i earn self employed? this is the awkward part i can forsee.



Many thanks chaps and ladies.
Sorry for the agro

Steve

 

[computaguy]

My Dad always told me to avoid getting a partner in business.

He was right. One partner always seems to be putting more effort in than the other one is. Timne can be spent trying to be politically correct rather than getting on with the business of making money. Better to be a sole trader and have people who work with you and whose opinions you respect. At least that way when one of them bails out they don't wreck the whole of the business.

 

[accountancyextra]

Form a partnership - both register self employed, then to we tell some one we've become a partnership or do we just generaly work together?

Steve,

When you call the HMRCE newly self employed helpline to register, tell them that you are forming a partnership. they'll sort it all out for you