So of course before creating this idea and business I needed to research into the legal obligations of setting up a business and the different types of businesses there are. By using Gov.uk I was able to get a step by step definition and guide of setting up your own business.
Private Limited Company
A private limited company means that the company is legally separate to the people that run it, it has separate finances form your personal ones and that you can keep any of the profits after paying tax. This would mean Lola and I would have a 'incorporation', and included in that involves:
- A suitable company name. -LoAm LTD-
- An address for the company.
- At least one director (those legally responsible for running the company)
- Details of the company's shares- at least one share holder ( shareholders have certain rights, most companies are owned by shareholders, e.g directors may need shareholders to vote and agree to changes in the company)
- To check what your SIC code is (standard industrial classification of economic activities, so a description your company's nature of business)
Lastly you need:
- The shareholders to agree to the company and the written rules.
- Details of people with significant control, i.e anyone with over 25% of shares or voting rights.
When it came to finding what specific business obligations and legal requirements there were, I had no idea about how many varieties there were (as seen below) however upon research I find that a private limited company would be the most effective for Lola and I, as essentially we would be a private company where it isn't attached to our names as such (legally separate from the people that run it), profits can be taken minus tax of course and just would be the most effective currently.
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| GOV.UK |
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