Starting up in business – key takeaways from Ryecroft Glenton webinar

On Wednesday 14th September, Ryecroft Glenton, in conjunction with the ICAEW and Barclays Eagle Labs, delivered a webinar on the subject of Starting up in Business.

The key takeaways from the webinar were:

Choice of trading entity: Start-up businesses have a choice between using a limited company, sole trader, or a Limited Liability Partnership. Whilst a limited company is seen as the default option for most new businesses there are can be a significant tax benefit from commencing as a sole trader before moving on to use a limited company at a later stage.

Financing: If you possibly can, make sure that any business angel you accept significant funding from is a good fit, in terms of sector expertise and personality, for you and your business and that they are able and willing to provide follow on funding once the initial funds are exhausted.

EIS/SEIS relief: The enterprise investment scheme is a significant incentive for potential angel investors, with 50% (SEIS) and 30% (EIS) tax relief available but it can be complicated to navigate and very costly for your investors if you make any mistakes: make sure you take the time to understand the basics and ensure that you use an accountant who is very familiar with the process.

Legal: A shareholders’ agreement is the business equivalent of a pre-nuptial agreement: hopefully its not needed but if relationships between founders do break down its important to have one. Don’t forget to get an employment lawyer on board to draft employment contracts that are fit for your business: employment law is a minefield.

Finance function: Make sure you choose a suitable bookkeeping software package (Xero or Quickbooks are the market leaders) and don’t forget to obtain training so you use it correctly from inception. Consider paying an accountancy firm to do your bookkeeping for you during the start-up phase: this is likely to be more cost effective than hiring your own bookkeeper and you will benefit from the wider advice that an accountancy firm can deliver.

Tax advice and compliance: A start-up business has a number of tax compliance hoops to jump through including registering for VAT, obtaining advance assurance for SEIS/EIS investment, setting up a payroll including pension provision and registering as self employed with HMRC if you opt for the sole trader route.

Personal: Don’t neglect some basic personal housekeeping matters that will help your family if you die or suffer a serious illness that leaves you incapacitated. Take out life and critical illness insurance cover, make sure you have an up to date Will and register a lasting power of attorney document.

If you are contemplating starting your own business or you are in the early stages of doing so, please do get in touch to find out how we might be able to help you.

Photo by Brandy Kennedy on Unsplash

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