Questions on starting a company

drdmt

Hi, i'm starting a company but am stuck as to whether to register it as a coop or ltd

I'm not entirely sure how a coop works the information between different websites seems different and confusing

Any explanations are greatly appreciated

paddyrg

More clues needed!! *Is* it a co-operative?

drdmt

paddyrg wrote: »

More clues needed!! *Is* it a co-operative?

I dont know yet, it was originally going to be a llp with several partners but recently found out about the coop option

yes please read my first post above again

Annisele

If there are going to be several partners involved...find an accountant or solicitor and ask him.

Co-operatives are owned by their members. Limited companies are owned by their shareholders. Partnerships are 'owned' by the partners.

There are all kinds of tax and other consequences to the choice, and if your turnover is likely to be more than minimal you should really get advice before you set it up.

If you want more information from the forum, it would help if you gave more information about what you want to do, and what you're confused by. Thus far we can't do much more than some googling for you...

drdmt

Annisele wrote: »

If there are going to be several partners involved...find an accountant or solicitor and ask him.

Co-operatives are owned by their members. Limited companies are owned by their shareholders. Partnerships are 'owned' by the partners.

There are all kinds of tax and other consequences to the choice, and if your turnover is likely to be more than minimal you should really get advice before you set it up.

If you want more information from the forum, it would help if you gave more information about what you want to do, and what you're confused by. Thus far we can't do much more than some googling for you...

The idea is to do work, be paid a set wage per hour and receive a share of the profit at the end of the year

There would be multiple people working for me, joiners, electricians, secretaries, programmers etc

I'm looking for the one which would provide least paperwork

For example:

there are seven of us

Dave
Dee
Dozy
Beaky
Mitch
Titch
and Myself

If mitch does 6 hours work he gets paid 6 hours, all profit goes into 'the xanadu' account

If i do 5 hours i get paid 5 hours and it goes into the xanadu account

we are all paid monthly

at the end of the year 1/9 of the profit is re-invested, 1/9 goes to our charity of choice and the rest split between us 7

steve1980

Get an accountant for the tax and a solicitor for the agreements.

Don't try to do it yourself.

chalkie99

drdmt wrote: »

For example:

there are seven of us

Dave
Dee
Dozy
Beaky
Mitch
Titch
and Myself

Your immediate problem is that Dave Dee only counts as one person and, unfortunately, died 2 years ago so you are already short handed before you start.

Pennywise

This will all end in tears and lost friends if you don't get an accountant and solicitor on board and get professional advice from the outset. You're not going to survive that kind of relationship based on freebie advice from random strangers on the internet.

drdmt

Pennywise wrote: »

This will all end in tears and lost friends if you don't get an accountant and solicitor on board and get professional advice from the outset. You're not going to survive that kind of relationship based on freebie advice from random strangers on the internet.

Cheers for the advice, I will be seeking advice from a solicitor/accountant but does the strategy above sound more something that would be coop or llp?

paddyrg

I like the sound of a co-op for this, but yep, this certainly sounds like one to get right with an accountant plus a watertight legal agreement now, before there is money involved. Everyone should contribute equally to the startup costs which will include that legal agreement.

Contracts and lawyers are for agreeing in peacetime what you will do in case of war - things *will* go wrong, you need to agree what to do in these cases before there is any cash involved or there will be tears - start thinking about it right now - for instance...

* Mitch brings in 50% of the business, does he get the same rate of pay as everyone else?
* Dave seems to be doing all the admin, not billable hours - how does he benefit?
* Beaky decides it is not for him and takes work directly, not through the co-op/consortium, what's to stop him? Does he still get his 11%? How do you police this?
* Dee leaves the area - now what?
* Titch's brother wants to join, as does Dozy's - does the money now go 11 ways, or do you ringfence the money for running the company and charity?
* An unexpected bill comes in, it is more than the company's share. Now what?

All of these are workable outable, but you have to do that in advance, not when you're in the middle of things or it will sting!

Annisele

drdmt wrote: »

The idea is to do work, be paid a set wage per hour and receive a share of the profit at the end of the year

There would be multiple people working for me, joiners, electricians, secretaries, programmers etc

I'm looking for the one which would provide least paperwork

Now I'm scratching my head as to what on earth you could be doing that involves a joiner, a secretary and a programmer - let alone the "etc" people!

I'm not sure that a goal of having the least paperwork is helpful to you at the moment.

For example, it's possible to set up a partnership with no paperwork at all. But, you'd be utterly crazy to do that with seven people involved! A partnership with no explicit partnership agreement can leave you with a daft situation where partners can't retire or be expelled, or where one person has wandered off to the US and done no work for months but you're still required to pay him his share of the profits.

I'm employed now, but I've been a director of a limited company in the past. That did produce more paperwork than I'd have ideally liked - but it was very easy to deal with: find a decent accountant; tell him what you what; check and sign the bits of paper he sends; send him some money. I know he saved me far more in tax than he cost me, so I was happy.