Small business - What steps we need to folow

Myself and my friend are both full time employed by a large company. We both work on the same contract (permanent job) for the last few years. Our client, the owner of the building is using a specific product (a part) to maintain their building. They are getting this part delivered and it's quite expensive. One of the client's directors during a loose conversation mentioned that myself and my mate should get this product straight from China and start selling it cheaper to them (the client). He said they can't do it themselves because of conflict of interest, but we could.
Myself and my mate could get this part cheap from China. We want to start selling it via website and we would only sell to this one customer.
Question:
What steps we would need to take from legal perspective? LTD company? Anything else?
Obviously we would need to get a bank account etc...

Thanks

Comments

  • spadoosh
    spadoosh Posts: 8,732
    Name Dropper Photogenic First Anniversary First Post
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    Id firstly look at your employment contract. Its not uncommon to have restrictions put in place to avoid these types of things. OK you might not be costing them money directly but you might cost them a customer if you mess up and they blame your employer because your face works there.

    The next thing youll need to be aware of is the costs involved. There almost certainly will be import taxes you need to be adding in, something you might get away with as a customer, not likely as business. Then theres thing like exchange rates that will need to be taken in to account.

    As for going with a ltd company that will depend on the nature of the company. Youve got options, your looking at partnership, limited liability partnership or a Ltd. The parntership will be easiest to set up whilst the limitied liability/ltd are more complicated but offer tax incentives and as the name suggests limited liability.

    One way or another you need to let people know what youre doing. If its ltd (limited liability partnership) youll need year end accounts, comapnies house and hmrc. If its partnership mainly HMRC and self assessments.

    Youll also need public liability insurance. Strictly speaking you might not (some businesses dont need it) but then the chances of buying something in from china, selling it on and something going wrong, i would say could be fairly high. And depending on how the business is set up the liability might not stop at the business.

    Look at your local council web pages and look for any business start up advice, its not unusal to have classes/seminars going over the basics. If you know nothing, its not a waste of time. Thoroughly go through hmrc and the .gov websites. Theyre a treasure trove of information and generally cover everything that is needed.

    If you have friends family who are business owners / accountants. Speak with them, whilst thye might not offer everything you need its conversations that could help guide you and inform.


    Its not hard to start a new business. The hard part is having a viable business and it appears someone has told you, you can do that from this. Personally, my first thought was if they are telling me to buy something cheaper so they can get it cheaper from me including my mark up why on earth are they as the consumer not buying direct? That companies buyers for whatever reason are deliberately choosing to pay more..... odd that.
  • 00ec25
    00ec25 Posts: 9,123
    Combo Breaker First Post
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    the building owner says it would be a "conflict of interest" if they cut out your employer and purchased the part directly themselves,

    that makes no sense

    It seems they are not tied to buying from your employer, since they are able to buy it from "you", if "you" set yourselves up as a direct competitor to your employer??

    So where is the conflict for them, since they can buy from you, making you the ones in conflict with your own employer?
  • Mistral001
    Mistral001 Posts: 5,346
    First Anniversary Name Dropper First Post I've been Money Tipped!
    Forumite
    When the OP says "our client", who does he mean? Is the client a client of the large company that employs the OP or is the client a prospective client of the business that the OP and his friend are planning to start?
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