Company Incorporation

Company Incorporation is the forming of a new business. Selecting the right business status for you is vital to commence trade.

The various structures and formats will affect the everyday management of the organisation. There are also other considerations for you to review such as applying ahead for VAT registration or waiting until you hit a certain sales band before applying. As a member to FashionCapital.co.uk you will receive mentoring advice on what business is right for you to open.

LIMITED COMPANY

The Limited Liability Company (LTD) separates your personal assets from the assets of the business.  The company becomes the person and you work for the company. The main advantage of this type of business is that it protects your own personal assets such as your house/flat, car, entertainment centre, widescreen TV and all the other large items that you already own.  If you have a business problem and your business has to cease trading or liquidates then you will only lose company assets but NOT your own personal assets.

Company assets are items that you buy, which are invoiced to your company and paid for by company cheque / account or credit card.  It’s up to you as to what you create as company assets but the main assets tend to include a company car or van, the lease on any business premises, computer system and office furniture. All of which are often purchased through the company.

You must be aware however that if you do experience business problems and have to close, liquidate or go into receivership and you have outstanding debts to pay then your creditors may chase you for their debts and you could lose any / all of your business assets. To buy or set up a limited company contact: www.companieshouse.gov.uk

PARTNERSHIP

This is firm with two or more proprietors. The same conditions apply as a sole trader. However, when it comes to liability for debts, the law says that all partners are jointly and severally responsible. This means that the people to whom you owe money can, in the last resort, sue any one partner for the whole lot. So if your partners take flight, you are liable to pay their business debts as well as your own share. However friendly you may be with the people with whom you are going into partnership, you are well advised to have a partnership agreement. You need a solicitor to do it properly for you.

SOLE TRADER

To trade as a Sole Trader, you must register your details with Revenue and Customs within 3 months of starting to trade.  Contact: www.hmrc.org.uk

As a sole trader, there is no protection of your personal assets.  What are personal assets, become parts of your business, no protection for your house, car, telephone, games consol etc or other proud possessions?

It used to be easier to start your designer label business off as a Sole Trader because the amount of paperwork and administration required by legislation