Running a small incorporated business within the parameters of the law is much more complex than many people imagine. There are thousands of small companies operating in the UK, many of which have just one or two members. However, of those companies there is a substantial minority operating their business ignorant to what is legally required of them, that could ultimately face litigation were they ever to sell their small business to savvy, well advised investors.
As a result of recent legislation, the limited company no longer requires a company secretary and there is only a requirement for one director in private limited companies. Thus it?s now possible to run a private limited company as a one-man band, without the need for involving others in its administration and management. However, many small businessmen fall into the trap of believing that means they can treat the business as an extension of themselves, or as a piggy bank from which they can take money as and when they please.
Unfortunately as many find out when they later try to sell their business, or bring on an investor, this is not the case. The limited company is a separate legal person, and taking money that has not been authorised from the company, i.e. an unlawful distribution could land you in serious trouble with the courts. The company should be run properly and managed well. Any payments to you should be in the form of a salary, bonus or dividend payment and should be recorded in writing for the sake of record keeping.
On the subject of keeping records within your small business, a limited company is legally required to maintain day to day financial records and to retain these records for inspection for up to 3 years. If you don?t have these records, both the company and the directors have committed a criminal offence and can be subject to criminal penalties as a result. If you?re running a small business without keeping adequate records, it may be time to start considering your options, and it?s better to start keeping those records right away to ensure you do not fall further behind.
There are naturally tax implications of running a small business as an incorporated entity. For example, if you were to run a business making ?10,000 in profit, you would be subject to corporation tax of 20% on that ?10,000 and income tax on any money paid out as salary (assume ?20,000 which would also be taxable at 20% and deductible from the profit figure, plus National Insurance contributions). Thus the total tax paid in this instance would be ?6,000 plus additional National Insurance contributions at both employee and employer level. However, were the money to be paid out in dividends from a ?30,000 profit, National Insurance would no longer play a role, and the dividend payments would attract no additional tax.
Finally, running a small business requires the director to treat himself as an agent of the company, and to act in the best interests of the company rather than in his own interests as the major shareholder. Even where a director also owns 100% of the shares, it is his legal duty to act in the interest of the company and subsequent legal action from new shareholders tackling retrospective actions could see him liable to compensate the company in respect of any losses it sustained from him acting out with the scope of his duty.
Naz Daud - CityLocal Franchises Franchise Opportunities & Home Business Opportunity UK Business Directory & Internet Franchises UK Home Working
Baby Doll Lingerie: Sexy Gifts Galore
One of the most popular types of lingerie is the baby doll lingerie set. With innocence and raw sensuality, all in one, a babydoll is an impressive piece of sexy lingerie that can raise the temperature of men around the world. Most babydolls come in a wide variety of steamy materials, from silk to nylon. Best of all, babydolls come with spaghetti straps for ease of access and are trimmed with feathers or lace for that extra special risqu? touch. Check out baby doll lingerie today for the endless possibilities.
The North Face® Kids Gear and Clothing now available at Upsideover.com
Leading outdoor kids gear and clothing retailer now carries The North Face® clothing, boys and girls Denali jackets, footwear, sleeping bags and more.
Shoes Can Make The Plus Size Evening Gowns
To set off a dress, there's nothing like a great pair of shoes. Take Cinderella's story, for example: without the right footwear, she never would have gotten her prince! When you've selected your evening gown, be sure to spend time finding the right pair of shoes to coordinate with it. If your gown has sparkles, find some diamond-embellished heels, or consider dying some slippers to match the color of your dress.
HyperOffice Introduces HyperMeeting, Makes Online Meetings Easy for Small and Mid-sized Businesses
It's time to hold more meetings on the Web - especially now that gas prices are insane.
HyperOffice today introduced HyperMeeting, an easy-to-use web conferencing tool for small and mid-sized businesses.
Preteen Models Big Surprises Comes In A Small Package
Preteen Models falls under the age group from 8 to 13 years old and this particular age range are full of energy. It could be rightly said that big surprises comes in small package because at this stage a modeling agent could find youth, beauty, energy and talent packed in them ready to explode and most importantly they could be shaped into a desirable character. As they are in the learning stage so a scout or a modeling agent will not find any problems to guide them.
Small Business Operators - 7 Reasons You Should Change Your Accountant
A recent survey showed that only 28.7% of small business owners were happy with their accountant, and only half of those would recommend him to their friends because he was too busy already.
Shopping Tips and Tricks to Finding the Perfect Pair of Shoes
This article will provide you with some useful shopping tips and tricks to finding a perfect pair of shoes.Following a recent advertising campaign I asked a number of women what information they would find most useful about womens shoes.
The Different Cell Phone Accessories Available
Where do I start? Always start with the essentials. If you intend using the cell phone in the car it is important to purchase a hands free car kit.
Committee Examines Role of Credit Cards in Financing of Small Firms
Today, witnesses told the House Committee on Small Business that as traditional sources of capital diminish?including SBA loans?their credit card use is on the rise.
iPhone Accessories
Apple come up with iPhone is said to have a few revolutionary, very unique features.