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THE MECHANICS OF STARTING YOUR BUSINESS

Every business will be unique and have its own peculiarities. To provide all the information needed to start every business would be an impossible task and so I suggest you read what follows by way of an introductory guide to what’s involved. It may be that you will have to research further to make sure that the business you’re planning to start complies with all the rules and regulations of the day. The first thing you will need to decide is which ‘trading identity’ is suitable for your business.

HOW TO SET YOURSELF UP AS A SOLE TRADER

Setting yourself up as sole trader is relatively straightforward.

1. Contact the Inland Revenue

Request the form that you need to complete to register as self-employed. You should do this as soon as you start. If you fail to do this within the first three months of becoming self-employed you risk a fine of £100. The Inland Revenue also publishes a free Starting Up In Business guide, which is full of useful information regarding taxation and national insurance, employing people etc.

2. Your business name

We looked at what’s involved in choosing a name for your business in Chapter 3, but you need to be aware that if you are going to trade using a different name than your own, you must also include your own name on your headed note paper. Therefore if you’re a sole trader and name your business Discover Cornwall on Foot, business insurance resource,  somewhere on your headed notepaper you will have to include your name, trading as Discover Cornwall on Foot.

3. National Insurance

You will also be required to pay flat-rate Class 2 National Insurance Contributions currently at £2.05 a week, which can be paid by direct debit. If your profits exceed a certain limit, you will have to pay Class.

Conclusion

The most obvious being that as a company director your liability for the company’s debts is generally limited to your amount of shares. Your personal assets cannot be touched unless the company has been trading fraudulently or when the directors knew that it was insolvent.

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