Questions on starting a company

Savvy_Sue

Annisele wrote: »

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

I agree: you want the RIGHT paperwork, not the least paperwork.

Even a ltd co could agree to give a share to charity, and pay dividends on the rest.

I don't know enough about a Coop set up, but I do know that a ltd co has one significant advantage over a sole trader / simple partnership: if the business goes belly up, the directors are not personally liable for the company's debts, UNLESS personal guarantees have been given for bank loans or similar.

It IS more complicated, it DOES require more paperwork, and it is ongoing - but if it's the difference between losing your home and not, what's the best choice?

FatVonD

paddyrg wrote: »

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!

And that's not even taking into account the 'difficult' second album