Young Entrepreneur's starting mobile catering business

Marcon

THAAWT said:

Marcon said:

THAAWT said:

I have two 16 year olds (17 this year) and are looking to set up a mobile food van. my question is how we can go about them taking card payments without having a business bank account (as they are under 18)
They currently run a small confectionary business from home and are registered with hmrc etc (and currently take bank transfer or cash) but its the payment side of things for a mobile catering van as not everyone carries cash these days

Any advice would be much appreciated

Good on them! Confectionery is one thing, but a food van is a whole new ball game, particularly in terms of insurances, local authority approval, hygiene requirements etc depending on what they propose to sell. A business bank account is the least of their issues.

A limited company with a parent or two (or other adult) would seem the obvious route to go, at least for now. Minimum age to be a director is 16, so they can both continue to feel they are 'in charge' as far as possible.

One hugely valuable source of help for those aged 16+, and possible funding when they are a little older, is https://www.princes-trust.org.uk/

Thank you for your reply.  Yes they have hygiene level 2 certificates which is what required for a food van.  They know they'll have a EHO Inspection which they are currently looking into all the necessary checklists they'll need.

Do you happen to know if i put my name in the limited company how if would affect me? It would be literally just so they can get a bank account, but other than dropping them off to an event or similar and helping with paperwork then i wouldn't be involved.

Thank you i will take a look at the princes trust, i have heard good things

Depends on the role you undertake. Insurers/banks etc may insist on having an adult as a director, but might settle for having you as company secretary.

It does sound as though youthful enthusiasm should be tempered (not dampened!) by some detailed exploration of business considerations. Maybe letting the young entrepreneurs do the research would be a really good learning curve! Start here: https://www.gov.uk/browse/business

DullGreyGuy

THAAWT said:

DullGreyGuy said:

THAAWT said:

I have two 16 year olds (17 this year) and are looking to set up a mobile food van. my question is how we can go about them taking card payments without having a business bank account (as they are under 18)
They currently run a small confectionary business from home and are registered with hmrc etc (and currently take bank transfer or cash) but its the payment side of things for a mobile catering van as not everyone carries cash these days

Any advice would be much appreciated

I suspect most parents in similar situations would have to be involved in the business, firstly to drive the truck and secondly to enter into certain contracts. 

So option 1 is you get a Zettle or Square or SumUp device that they use to take card payments. You probably can set it up so that payment goes into an account in one of their names or a joint account if they have one. 

Option 2 may solve a few problems and that is to incorporate and operate via an LTD. Its overkill in many sense but as its the company that has the bank account, zettle device, insurances etc it avoids the issues of their ages. 

Thank you for your reply.  Yes, i would be dropping them off to events and then collecting them as I would if they had a job as we are in quite a remote area anyway.

So I have a PP account set up for them (in my name) which is then transferred straight to them.  Could i then set up a Zettle and do the same thing? 

I have no clue when it comes to LTD - whats the difference between that and what they're doing now (a partnership) - do you know how it would affect me if i'm listed on the LTD company?

Zettle is now a PayPal company and uses the same log in these days so should be simple to use the existing account to get the card reader etc 

So as a traditional partnership they'll be doing a partnership return and personal returns with them distributing all profits between them inline with agreement. As a limited company it's a bit more work as you now need to also send stuff off to Companies House which is doable on your own but not as friendly as self assessment was designed to be. Ideally you'd speak to an accountant to get professional advice before making the decision, 

There is no legal requirement for you to be listed, directors only have to be 16, and it's the company that contracts so avoids the age issue. If you were wanting credit etc then they may want a personal guarantee from someone over 18 but no requirement for that person to be a statutory director (or even shareholder).  Were you hoping it had an impact on you?

THAAWT

DullGreyGuy said:

THAAWT said:

DullGreyGuy said:

THAAWT said:

I have two 16 year olds (17 this year) and are looking to set up a mobile food van. my question is how we can go about them taking card payments without having a business bank account (as they are under 18)
They currently run a small confectionary business from home and are registered with hmrc etc (and currently take bank transfer or cash) but its the payment side of things for a mobile catering van as not everyone carries cash these days

Any advice would be much appreciated

I suspect most parents in similar situations would have to be involved in the business, firstly to drive the truck and secondly to enter into certain contracts. 

So option 1 is you get a Zettle or Square or SumUp device that they use to take card payments. You probably can set it up so that payment goes into an account in one of their names or a joint account if they have one. 

Option 2 may solve a few problems and that is to incorporate and operate via an LTD. Its overkill in many sense but as its the company that has the bank account, zettle device, insurances etc it avoids the issues of their ages. 

Thank you for your reply.  Yes, i would be dropping them off to events and then collecting them as I would if they had a job as we are in quite a remote area anyway.

So I have a PP account set up for them (in my name) which is then transferred straight to them.  Could i then set up a Zettle and do the same thing? 

I have no clue when it comes to LTD - whats the difference between that and what they're doing now (a partnership) - do you know how it would affect me if i'm listed on the LTD company?

Zettle is now a PayPal company and uses the same log in these days so should be simple to use the existing account to get the card reader etc 

So as a traditional partnership they'll be doing a partnership return and personal returns with them distributing all profits between them inline with agreement. As a limited company it's a bit more work as you now need to also send stuff off to Companies House which is doable on your own but not as friendly as self assessment was designed to be. Ideally you'd speak to an accountant to get professional advice before making the decision, 

There is no legal requirement for you to be listed, directors only have to be 16, and it's the company that contracts so avoids the age issue. If you were wanting credit etc then they may want a personal guarantee from someone over 18 but no requirement for that person to be a statutory director (or even shareholder).  Were you hoping it had an impact on you?

Yes we've done 2 Partnership and personal returns with everything split between them over the last 2 years.

Hmmmm, i'm not sure about the LTD company as i'd like to still be able to do it ourselves (unless it really took off then i'd maybe look into an accountant)

I am listed as  'trusted helper' for HMRC.

They don't need credit as have enough saved to buy a small trailer and stock, insurance etc to make a start.

With my involvement basically i want as little to do with it as possible, i am a full time carer to my husband and we are soon to be moving over to Universal Credit from TC.  
I basically am just trying to help them get set up, i don't want it to affect me in any way as its their business and finances, nothing to do with mine (does that make sense)?  But just seem to be stuck at the taking card payments/business bank account stage.

THAAWT

Marcon said:

THAAWT said:

Marcon said:

THAAWT said:

I have two 16 year olds (17 this year) and are looking to set up a mobile food van. my question is how we can go about them taking card payments without having a business bank account (as they are under 18)
They currently run a small confectionary business from home and are registered with hmrc etc (and currently take bank transfer or cash) but its the payment side of things for a mobile catering van as not everyone carries cash these days

Any advice would be much appreciated

Good on them! Confectionery is one thing, but a food van is a whole new ball game, particularly in terms of insurances, local authority approval, hygiene requirements etc depending on what they propose to sell. A business bank account is the least of their issues.

A limited company with a parent or two (or other adult) would seem the obvious route to go, at least for now. Minimum age to be a director is 16, so they can both continue to feel they are 'in charge' as far as possible.

One hugely valuable source of help for those aged 16+, and possible funding when they are a little older, is https://www.princes-trust.org.uk/

Thank you for your reply.  Yes they have hygiene level 2 certificates which is what required for a food van.  They know they'll have a EHO Inspection which they are currently looking into all the necessary checklists they'll need.

Do you happen to know if i put my name in the limited company how if would affect me? It would be literally just so they can get a bank account, but other than dropping them off to an event or similar and helping with paperwork then i wouldn't be involved.

Thank you i will take a look at the princes trust, i have heard good things

Depends on the role you undertake. Insurers/banks etc may insist on having an adult as a director, but might settle for having you as company secretary.

It does sound as though youthful enthusiasm should be tempered (not dampened!) by some detailed exploration of business considerations. Maybe letting the young entrepreneurs do the research would be a really good learning curve! Start here: https://www.gov.uk/browse/business

Thank you, yes they have been doing heaps of research and did everything to set up their current small business which was an absolute pain due to their age but i want to encourage as much as i can as they are very keen.
I will show them your link thank you.

When you say company secretary.  I am listed as their 'trusted helper' with HMRC.  Is this what you mean, or is there a more formal way of being listed as company secretary?

Savvy_Sue

Please do research whether being involved as a Company Director would affect the UC claim. 

I think Company Secretary would not have the same risks but I do not know.

https://www.gov.uk/limited-company-formation/appoint-directors-and-company-secretaries might help.

Marcon

THAAWT said:

Marcon said:

THAAWT said:

Marcon said:

THAAWT said:

I have two 16 year olds (17 this year) and are looking to set up a mobile food van. my question is how we can go about them taking card payments without having a business bank account (as they are under 18)
They currently run a small confectionary business from home and are registered with hmrc etc (and currently take bank transfer or cash) but its the payment side of things for a mobile catering van as not everyone carries cash these days

Any advice would be much appreciated

Good on them! Confectionery is one thing, but a food van is a whole new ball game, particularly in terms of insurances, local authority approval, hygiene requirements etc depending on what they propose to sell. A business bank account is the least of their issues.

A limited company with a parent or two (or other adult) would seem the obvious route to go, at least for now. Minimum age to be a director is 16, so they can both continue to feel they are 'in charge' as far as possible.

One hugely valuable source of help for those aged 16+, and possible funding when they are a little older, is https://www.princes-trust.org.uk/

Thank you for your reply.  Yes they have hygiene level 2 certificates which is what required for a food van.  They know they'll have a EHO Inspection which they are currently looking into all the necessary checklists they'll need.

Do you happen to know if i put my name in the limited company how if would affect me? It would be literally just so they can get a bank account, but other than dropping them off to an event or similar and helping with paperwork then i wouldn't be involved.

Thank you i will take a look at the princes trust, i have heard good things

Depends on the role you undertake. Insurers/banks etc may insist on having an adult as a director, but might settle for having you as company secretary.

It does sound as though youthful enthusiasm should be tempered (not dampened!) by some detailed exploration of business considerations. Maybe letting the young entrepreneurs do the research would be a really good learning curve! Start here: https://www.gov.uk/browse/business

Thank you, yes they have been doing heaps of research and did everything to set up their current small business which was an absolute pain due to their age but i want to encourage as much as i can as they are very keen.
I will show them your link thank you.

When you say company secretary.  I am listed as their 'trusted helper' with HMRC.  Is this what you mean, or is there a more formal way of being listed as company secretary?

A limited company is actually a rather simpler structure to deal with than a limited liability partnership and there is nothing at all to stop you going the DIY route. Filing accounts for a micro company (which is what this will be, at least for now until it takes off and goes global!) is easy to do online; no audit needed, no charge for filing them. There's an annual £13 fee covering the company's confirmation statement - again, easy to do online and takes but a few minutes.

There's no requirement for most companies to have a company secretary, but the role still formally exists. The problem is whether banks and insurers could deal with a limited company where the directors are all under age, which is almost certainly a 'no'. 

This might make helpful general reading: https://static.swlep.co.uk/swlep/docs/librariesprovider2/premium-resources/cobra-factsheets/starting-a-business-while-under-18.pdf?sfvrsn=dac7d6ea_4#:~:text=Although%20there%20is%20no%20legal,a%20contract%20with%20the%20bank.

I can understand the concern about UC or other benefit claims. Is there another trusted adult who could be brought into the frame? 

Encouraging them goes without saying, but there's no harm in a young entrepreneur learning some facts of life, albeit unpalatable, at a young age. The great beauty of being young is that the passage of time solves some of the problems, and in little more than a year in this case...

THAAWT

ok after a bit more reading i *think* i want to keep out of it completely ie being named in the business as secretary or director due to it possibly affecting my UC in the future

So.... any thoughts on them still being able to proceed before they are 18?
(just thinking out loud and if any one has any thoughts it would be appreciated)

Is it possible to run a mobile catering trailer cash only? (again yes they are registered with HMRC and do do tax returns each year)

Or should i open a Zettle through current PP account? is that ok if i transfer it straight to their accounts? actually it would probably be used to buy more stock etc rather than transferred!?

Not sure there is another solution or if it is even possible?

Marcon

THAAWT said:

ok after a bit more reading i *think* i want to keep out of it completely ie being named in the business as secretary or director due to it possibly affecting my UC in the future

So.... any thoughts on them still being able to proceed before they are 18?
(just thinking out loud and if any one has any thoughts it would be appreciated)

Is it possible to run a mobile catering trailer cash only? (again yes they are registered with HMRC and do do tax returns each year)

Or should i open a Zettle through current PP account? is that ok if i transfer it straight to their accounts? actually it would probably be used to buy more stock etc rather than transferred!?

Not sure there is another solution or if it is even possible?

Where is this mobile catering trailer going to be parked? You can't just set up on the roadside, and if they envisage renting a pitch at some sort of event, they'll almost certainly be required to show evidence of the necessary insurances.

Just a thought...why are you on this site asking the questions (yes, I can understand why!) when it is their business? They need to learn early on to take ownership of the problems and frustrations - and if they are deterred by such a minor and temporary stumbling block as being just over a year too young (and a year is such a long time when you're that age), it doesn't bode well for their future.

Developing business plans, getting to grips with some basic bookkeeping skills, doing some free online marketing courses...there is so much they could do while the calendar ticks on.

Savvy_Sue

THAAWT said:

Or should i open a Zettle through current PP account? is that ok if i transfer it straight to their accounts? actually it would probably be used to buy more stock etc rather than transferred!?

I can't see why that wouldn't work. However, get them to read up on the agreements, and if you find a clause saying you can't use this paypal account for business then you do have a potential problem. I think there are paypal business accounts, that would solve that one but will probably cost more. 

You asked about cash only: I've known a few, but since Covid I've always done a double take when I've met a 'cash only' request. I think the ice cream vans were among the longest to stick to that: even our chippy went onto cards! And I think one of your problems with it is that if someone doesn't see the signs saying 'cash only', and the food is being prepared while they argue about it, you've still prepped some food you've not able to sell - at least not to the person you intended to sell it to. 

Either cash only or card only will lose you some business: hybrid is best! 

Savvy_Sue

Marcon said:

Where is this mobile catering trailer going to be parked? You can't just set up on the roadside, and if they envisage renting a pitch at some sort of event, they'll almost certainly be required to show evidence of the necessary insurances.

One thing to be aware of where I live: not only are the council increasing pitch fees for mobile catering outlets by a significant amount, they are also expecting a % of the profit. Unsurprisingly there's been a bit of resistance to this - after all, once you've paid your business rates, you don't have to then hand over a % to the local authority - but I don't know how successful it's been.