Setting up a business (US company, in UK)

WildWayz

Hi guys

Apologies if this is a bit muddled; i'll try to explain it easily as possible.

I have been offered a job working for a new US company who is launching their first product world-wide.
They have an office setup in America, and are wanting a UK branch that handles build, tech support and shipping of the products (which covers Europe).
All sales are handled in America.

Now, what are my options here in terms of protecting myself, and how to set up a business here?

He has suggested maybe I set myself up as a business, and he contracts the work to me. If that is the case, i'd be either a sole trader or PLC (to start, just me will be employed full time but a part time person will hired later on).

Now, i'll be getting paid a wage and expenses - but how would he pay me? Is this the better option or is there an easier way for him to open a tech center over here?

I'm insisting on a contract to protect both of us - so he can't just take me on, then let me go whenever he likes (well, within reason ie if it all fails).

Apologies if I am a newbie - we have all got to start somewhere!

Thanks for any help

James

Brassedoff

WildWayz wrote: »

Hi guys

Apologies if this is a bit muddled; i'll try to explain it easily as possible.

I have been offered a job working for a new US company who is launching their first product world-wide.
They have an office setup in America, and are wanting a UK branch that handles build, tech support and shipping of the products (which covers Europe).
All sales are handled in America.

Now, what are my options here in terms of protecting myself, and how to set up a business here?

He has suggested maybe I set myself up as a business, and he contracts the work to me. If that is the case, i'd be either a sole trader or PLC (to start, just me will be employed full time but a part time person will hired later on).

Now, i'll be getting paid a wage and expenses - but how would he pay me? Is this the better option or is there an easier way for him to open a tech center over here?

I'm insisting on a contract to protect both of us - so he can't just take me on, then let me go whenever he likes (well, within reason ie if it all fails).

Apologies if I am a newbie - we have all got to start somewhere!

Thanks for any help

James

This is Bread & Butter, to be honest it would take an hour to type up and run through. You have quoted a few strange things that are not the norm when going from the US to EU/UK.

Get some lists of what you need specifically to move it forward

PLC for a one man operation? You do not pass the test. Limited Company is your only option.

WildWayz

Apologies - will try to be a little clearer...

A new American start up company who is making paintball gear is about to launch their first paintball gun. I've been helping them up to this point by setting up a support system.

They want a UK office which handles building, tech support and shipping of their paintball gun within the UK and Europe. They have asked me to head it up.

However, they have no UK presence at the moment... so it was suggested I start up my own company and be 'contracted' by them to fulfill what they want.

From reading websites last night, it looks like that is the only option; I would be responsible for filing my own tax returns, NI etc

They'll be paying rent on premises, utilities etc

I am wanting to know how to secure things so they can't turn around and just say "nah we've found someone else" - i'll be leaving a 'stable' job to head this up (well, in a year I am not sure my current job will be here due to all the selling off and restructuring).

I know the guy in America quite well - he is also coming over in September for 2 weeks to talk things over and also we are running an event to promote it together.

Does this help some more?

CKhalvashi

The easiest way to do it would be an EU-based company (Ireland and Luxembourg are the best known two), but UK would do.

EU office handles everything in Europe, whilst both UK and US offices are owned by 2nd US company, acting as Holding Co.

Brassedoff is probably more versed with US Co law than I am, so I will leave her to guide on this, however this seems to be the structure that most of the US Multinationals have.

Sorry if this is wrong Brassedoff, I have no dealings with the US in terms of business at all.

CK

WildWayz

Thanks

This is a small company at the moment, but with good backing - if it helps.

As mentioned, no sales will be handled in the UK - it is purely support, shipping and assembly - the parts are made in the UK too - but by another company.

CKhalvashi

WildWayz wrote: »

Thanks

This is a small company at the moment, but with good backing - if it helps.

As mentioned, no sales will be handled in the UK - it is purely support, shipping and assembly - the parts are made in the UK too - but by another company.

You'll find it much more tax-efficient to run the EU sales through an EU company.

CK

paddyrg

Even if sales are made via the US, VAT is likely to be an issue. You need to ask your accountant about this.

Assembly, delivery and support - sounds very feasible, but adding sales to that isn't a big deal either, even if it's done under license so the bulk of the money goes back to the US.

Security for yourself - tricky one. If you want actual security you need to be a part of the parent company in some way, so yes, talk to the lawyers. Perhaps you could have a shareholding in them so at least you can still profit if they decide to go with someone else (and it makes them less inclined to do so)? Perhaps you could buy the European franchise for sales, support and repairs? Perhaps they could engage your company on a 5+ year contract?

Just thinking aloud

WildWayz

Thanks - it is all food for thought. I know nothing is safe - maybe ask them for a rolling x year contract?

paddyrg

WildWayz wrote: »

Thanks - it is all food for thought. I know nothing is safe - maybe ask them for a rolling x year contract?

Or a (5? 10?) year exclusive contract with break options every x years for either party with a minimum notice of y months of intention to break/renegotiate. World's your oyster, be as creative as you like, but get real legal advice.

WildWayz

Aye - going to get a solicitor to look over the contract - end of the day, it needs to be fair for both of us.

Thanks guys!

paulwf

If they are handling all aspects of sales, covering the rent on premises and paying you a wage and expenses why can't you just be an employee? It will be far less hassle for you and they can still build in commission.

How they structure the business is up to them, if you start getting involved with solicitors, accountants and bank accounts your costs will mount up for no good reason.

You'll get an employment contract like any other employee as your job security, naturally no employment is ever 100% guaranteed but if their sales don't materialise you can just walk away instead of being wrapped up in company admin. I'd also be very concerned about product liability, let them sort out that hassle.

Edit: hiring and firing staff is also a PITA so better to let them employ extra part timers rather than you doing it through your own company.