Research for a small media business
Legal status of a business
When you start own small business you need to think about the different forms of running a business. Deciding which path to go down will have a lasting impact in a way the company will go in.
Sole Trader
The first one is a Sole Trader. A business that has this type of status is very common. Its under the management of one person only. This means they will be in charge of running the business and will have total control. Although it being a sole owner type of business, they can employ some staff. Depending on their income tax rate, this is how they determine whether to employ staff or not.
Sole traders businesses are kept small and easy to manage. They are kept small so they can keep it organised. Not including taxes, any profit that is made will all belong to the sole trader. That's why most people become sole traders, as that is the main benefit from being one. That is why you have to make sure that the business would work out and become successful as its a risky job.
Due to the increased risks of liability and expenses, a large business with a sole trader would be impossible to manage.
Partnership
Partnership is also another type of Legal status. These types of businesses are under the ownership of three or more self employed owners. Partnership businesses can also be owned between a group of owners, other businesses or even corporations. People who are involved in a Partnership, make sure they share the businesses profits with the right types of people, making sure they will gain a significant part in the partnership business. Knowing you are in a partnership business you will be sharing a business with others but also you will be splitting profits amongst one another which means they will all gain income depending on the success of the business. The only problem is if the business is failing in success, everyone involved would be suffering from their debts and unlimited liability. Another problem is if they have a major disagreement between the business partners which may cost the business further down the line.
The advantage in a partnership business, the management responsibilities are shared amongst owners who also have different skills and also the business would not suffer if one member was gone for a certain amount of time. The bad thing is if one partner breaks away from the group then the rest of the partnership would suffer.
Limited business
This means that the companies finances are separated from the personal finances. Its own legal existence which makes it an independent entity. When setting up a limited business you only get a limited amount of liability debts but has a unlimited amount of years of organisation as the business would be under the management. The management would ensure the control and efficiency of the business. The disadvantage is setting up a company in this type of status as there are high costs due to the necessary costs required to build the business up with. This means before starting it up you would need a large amount of money to begin.
Corporation
This type of business is ran under a few people at a time not just one person. The group of staff manage the business to make sure its maintained and has an efficient rate. Whereas the other group of staff manage the business itself. They usually work on product manufacturing, equipment managing and the transportation of it all. The managers and directors will look for and sort out and finance, marketing and successful rates they have been seen. The staff involved in the business will all end up with different amounts of income depending on their value in the business.
Corporations have to deal with Legal rights and responsibilities. They also have limits which all depends on the shareholders and ownerships they are working with.
Legal aspects of a business
Every business has to include Legal precautions as they are all necessary to make sure the business they are making and running is legal.
Law
If you are wanting to start a business and are thinking of employing staff, you need to make sure you accept the employment law. Other laws including the National Minimum wage Act, the Working Times Regulations Act and Equality Act. You have to make sure that you comply with these laws otherwise they can sue you from not complying to them.
National minimum wage
Working Times Regulations
When someone has been working for 6 hours or more are entitled to a break which last no less than 20 minutes. For younger people, if they've worked 4 and a half they are entitled to a break. They still get paid for being on their break as it is required.
Equality
This protects people from discrimination in a workplace. It replaced the previous act of anti discrimination laws with a single Act, making the Laws easier to understand and strengthening protection in some situations.
Health and safety regulations
When running your own business, you are responsible for taking steps needed to ensure their well being. This also includes members of the public who might buy from the business. Here are some health and safety issues that can occur in a work place. Work related stress which could possibly lead to illness and lung disease which is a lot more fatal and that is why it is necessary to make sure that the business has plenty of health and safety checks and is suitable for a work place. Usually every 18 months the inspectors would come around to make sure everything is health and safety efficient.
Fire safety
The fire precautions should be something they think major about. They need to make sure that this one of the first things they think about when it comes to making a business. As the owner you have to carry out assessments in a work place to avoid unwanted disasters. During the assessments they should pick up and potential risks that may cause any harm. You also have to make sure they have fire exits, which are also reachable. This is so people are able to leave the building easily and without any panic. Letting the workers and public know when they enter the building where the exits are and how to exit the building appropriately.
Fire safety
The fire precautions should be something they think major about. They need to make sure that this one of the first things they think about when it comes to making a business. As the owner you have to carry out assessments in a work place to avoid unwanted disasters. During the assessments they should pick up and potential risks that may cause any harm. You also have to make sure they have fire exits, which are also reachable. This is so people are able to leave the building easily and without any panic. Letting the workers and public know when they enter the building where the exits are and how to exit the building appropriately.
Tax Liabilities of a business
Most businesses will have to pay some sort of Tax from having there business. This is to help secure your business and finances but most importantly to avoid any legal charges.
Sole trader Tax
As there's only one owner to the business, which being self employed, is the only one who is responsible for paying the tax. The profits and business can be kept if they pay for the taxes towards (HM Revenue and Customs). As its only one person involved they must take responsibility for managing the business tax. This includes sending a self assessment tax return which is done annually, paying the income taxes the profits have been made on and finally the national insurance. If the profits the business is making are extreme then they would have to register for a VAT but that depends on how much the intake is to decide whether this would be possible.
Corporation Tax
Corporation taxes are only ever aimed towards the limited business. The limited company have to determine exactly how much tax they will be charged. As they have to calculated their own TAX they have to leave room for errors that could be possible. If the taxes are correct the tax goes straight to the Inland Revenue and doing this way will lead you out of not doing any assessments for it. When starting a business you are given nine months to generate income and then you are able to calculate Tax. This is for limited companies that come with an annual accounting.
VAT
Value added tax is something that gets added on top of products or services. The amount of Tax added on top depends how much the product or service is. Also depending where about the product gets distributes from. If your business is registered for VAT, they must be VAT taxableturnover which is £8300. If this has been done then HM Revenue will receive the registration and will then have you details on. This includes: VAT number and dates of return and payments.
National Insurance
Paying for National Insurance benefits everyone including yourself. This entitles the NHS, pensions, benefits and other important payments. Sole traders pay for their business tax, income tax and national insurance tax. As they are self employed the money comes out there own earnings. Limited companies only eligible to pay out of their earnings as its an employee on the business.
Source of Finance
Sometimes businesses need a little help with their financing and need to bit of extra cash to get along.
Loans
Most banks offer loans to businesses. Usually to those have a business plan up and ready to look through.this helps the bank to understand their business is going to consist of. If they think it will work then it will go through and they set a certain amount they are allowed to loan. Most of the time there will be added interest on top of what you owe. Before the contract is signed they will be informed that the amount they have to pay back will be more than what they had a loan of.
Grants
Grants are given out by the government through a business scheme. This payment is good as theres no repayments that are needed. The business will only be given the grant if the business funding is in breech of strict qualifications.
Investments
If you are interested in shares then investing would be a way to go. The investment involves offering a portion of both business and profits to another company. This is only is the company is willing to share its finance and fundings to help the business develop. As the investments will be a high demand you will have to make sacrifices.
Personal money
Using your own personal financing could be a risk. You may end up in debt yourself depending on how successful the business becomes. This could also be a reward if profits are made and you get to keep them. Or the money could be invested into something to help the business grow. Another way for funding money is from friends and family which could be added to the personal savings of that business.
Financial systems suitable for a business
In order for business to be sable, they take business financial systems.
Software system
This is a system that automatically tracks the businesses finances to help the business be more organised. Sometimes they may not always be someone who can manage them. Although it can be a prices piece of software, in the long run it helps out the business a lot. An example is quickbooks.co.uk is a software system for finance. For a small business this would cost £10.50 a month.
Wages system
There is now a software that controls employees wages. One of them being time rate systems. This system helps calculate employees wages in the business. It does this by processing the amount of time that the employee spends working. An example for software is Payroll system. This costs from £20 per month. Although its an extra cost to the business the business may be able afford this and may help them out a lot.
Record keeping
Businesses have to keep track of business transactions, bills, any outcome payments, workers information and profits. This is kept up to date for legal and evidential purposes. Just in case something goes wrong with a payment and they have proof of it. This can be kept through invoices from deliveries and other things that have been bought. Altogether, it will keep the business more organised.
How to control credit in a business
You have to make sure that you business expenses remaincheck. They do this by running credit checks which can be easily done online. One website and app you are able to use is Clear score which can simply do this. Although this can cost, it will ensure your business is running correctly and smoothly. An income example is if someone pay online to your business as they may not pay in time and you might have to pay out your own money to cover the cost while you wait. As the flows of the finance is a very important essential to make your business successful, it important to use these credit checks to make sure everything is running how it should be. Most companies want to make sure they have a tight grip of there business, not wanting anything to go wrong. The company should use credit application forms. When someone orders something online the customer gets a unique account number. This is how you can check there credit score for new customers. This is so you know what the customers are like, whether they are reliable or not.
Plan
I am going to do a video or maybe a video over of what my findings are. Over the voice over I will apply videos or pictures of what im talking about to give a better understanding of what im talking about.
Script
I am no going to talk about my findings on this topic and give you a basic overview of what everything is.
Legal status of business. I have found out a lot more about sole traders, partnership, corporation and limited companies. Starting with sole traders, this seems to be a very common business that most people set up. These are self employed people who want to have the risks of the business but have the reward of the profits. Although in a sole trader business you are able to employ staff, partnership businesses are able to work with others but with agreements and disagreements. This particular type of business will have three or more people working together making profits and income for a business. They all work together to achieve this. On the other hand Limited liability has control of the costs to start the business which is very high. Along with corporation, they cant determine what income they are getting as it changes every month depending how well the business is that particular month.
When starting a business you will obviously need to learn the different laws that are needed in a business to make sure everything is legal. If they don't oblige to the laws then the business could be in trouble. For example the nation minimum wage is a legal amount that people should get paid to make sure that they get paid equally and fairly. Other laws such as Health and safety is also needed when setting up a business that people would be going into, such as a property on a location that someone may be at harm if something did happen. I would be down to the business to make such the health and safety of the property is good enough for customers and employees are safe to go into.
Not just thinking of everyone else, the business also has TAX to sort out. The business has to think about what other TAXs need to be paid out of the money they get from income. National insurance is one of them. As national insurance benefits us all, business don't mind giving some amount of money to it.
When starting a business, its very difficult to decide what kind of support you want to do with money. Whether its a Grant, investments, loans and personal money. Most of them are difficult in different ways depeding how you are with your own financing. Grants are difficult to get hold of as you have to get your own funding for the government to give you money that you don't have to oay back. Investments are difficult as you have to get other businesses to invest and your own to get the money together which can take time. Personal funding can be possible depending how much you have and what your business is going to consist of. Loans is when you borrow money from the bank but you have to oay it back after a certain amount of days. This also includes added interest which makes it more money than you borrowed. The interest gets higher if you don't pay it back when it should be paid back. Its a prompt for you to pay it back on time I think personally.
When dealing with so much money in a business its good to keep organised. Businesses use system so that they can keep on track of what their finances are. Although you have to pay for this software in the long run they are able to keep on top of it. When it comes down to credit scores. They can easily be done with the uses of this.
I hope the information I have mentioned in this podcast has given everyone a better understanding of what it is like the start up a small business. Its not as easy as it looks or sounds.
Sole trader Tax
As there's only one owner to the business, which being self employed, is the only one who is responsible for paying the tax. The profits and business can be kept if they pay for the taxes towards (HM Revenue and Customs). As its only one person involved they must take responsibility for managing the business tax. This includes sending a self assessment tax return which is done annually, paying the income taxes the profits have been made on and finally the national insurance. If the profits the business is making are extreme then they would have to register for a VAT but that depends on how much the intake is to decide whether this would be possible.
Corporation Tax
Corporation taxes are only ever aimed towards the limited business. The limited company have to determine exactly how much tax they will be charged. As they have to calculated their own TAX they have to leave room for errors that could be possible. If the taxes are correct the tax goes straight to the Inland Revenue and doing this way will lead you out of not doing any assessments for it. When starting a business you are given nine months to generate income and then you are able to calculate Tax. This is for limited companies that come with an annual accounting.
VAT
Value added tax is something that gets added on top of products or services. The amount of Tax added on top depends how much the product or service is. Also depending where about the product gets distributes from. If your business is registered for VAT, they must be VAT taxableturnover which is £8300. If this has been done then HM Revenue will receive the registration and will then have you details on. This includes: VAT number and dates of return and payments.
National Insurance
Paying for National Insurance benefits everyone including yourself. This entitles the NHS, pensions, benefits and other important payments. Sole traders pay for their business tax, income tax and national insurance tax. As they are self employed the money comes out there own earnings. Limited companies only eligible to pay out of their earnings as its an employee on the business.
Source of Finance
Sometimes businesses need a little help with their financing and need to bit of extra cash to get along.
Loans
Most banks offer loans to businesses. Usually to those have a business plan up and ready to look through.this helps the bank to understand their business is going to consist of. If they think it will work then it will go through and they set a certain amount they are allowed to loan. Most of the time there will be added interest on top of what you owe. Before the contract is signed they will be informed that the amount they have to pay back will be more than what they had a loan of.
Grants
Grants are given out by the government through a business scheme. This payment is good as theres no repayments that are needed. The business will only be given the grant if the business funding is in breech of strict qualifications.
Investments
If you are interested in shares then investing would be a way to go. The investment involves offering a portion of both business and profits to another company. This is only is the company is willing to share its finance and fundings to help the business develop. As the investments will be a high demand you will have to make sacrifices.
Personal money
Using your own personal financing could be a risk. You may end up in debt yourself depending on how successful the business becomes. This could also be a reward if profits are made and you get to keep them. Or the money could be invested into something to help the business grow. Another way for funding money is from friends and family which could be added to the personal savings of that business.
Financial systems suitable for a business
In order for business to be sable, they take business financial systems.
Software system
This is a system that automatically tracks the businesses finances to help the business be more organised. Sometimes they may not always be someone who can manage them. Although it can be a prices piece of software, in the long run it helps out the business a lot. An example is quickbooks.co.uk is a software system for finance. For a small business this would cost £10.50 a month.
Wages system
There is now a software that controls employees wages. One of them being time rate systems. This system helps calculate employees wages in the business. It does this by processing the amount of time that the employee spends working. An example for software is Payroll system. This costs from £20 per month. Although its an extra cost to the business the business may be able afford this and may help them out a lot.
Record keeping
Businesses have to keep track of business transactions, bills, any outcome payments, workers information and profits. This is kept up to date for legal and evidential purposes. Just in case something goes wrong with a payment and they have proof of it. This can be kept through invoices from deliveries and other things that have been bought. Altogether, it will keep the business more organised.
How to control credit in a business
You have to make sure that you business expenses remaincheck. They do this by running credit checks which can be easily done online. One website and app you are able to use is Clear score which can simply do this. Although this can cost, it will ensure your business is running correctly and smoothly. An income example is if someone pay online to your business as they may not pay in time and you might have to pay out your own money to cover the cost while you wait. As the flows of the finance is a very important essential to make your business successful, it important to use these credit checks to make sure everything is running how it should be. Most companies want to make sure they have a tight grip of there business, not wanting anything to go wrong. The company should use credit application forms. When someone orders something online the customer gets a unique account number. This is how you can check there credit score for new customers. This is so you know what the customers are like, whether they are reliable or not.
Plan
I am going to do a video or maybe a video over of what my findings are. Over the voice over I will apply videos or pictures of what im talking about to give a better understanding of what im talking about.
Script
I am no going to talk about my findings on this topic and give you a basic overview of what everything is.
Legal status of business. I have found out a lot more about sole traders, partnership, corporation and limited companies. Starting with sole traders, this seems to be a very common business that most people set up. These are self employed people who want to have the risks of the business but have the reward of the profits. Although in a sole trader business you are able to employ staff, partnership businesses are able to work with others but with agreements and disagreements. This particular type of business will have three or more people working together making profits and income for a business. They all work together to achieve this. On the other hand Limited liability has control of the costs to start the business which is very high. Along with corporation, they cant determine what income they are getting as it changes every month depending how well the business is that particular month.
When starting a business you will obviously need to learn the different laws that are needed in a business to make sure everything is legal. If they don't oblige to the laws then the business could be in trouble. For example the nation minimum wage is a legal amount that people should get paid to make sure that they get paid equally and fairly. Other laws such as Health and safety is also needed when setting up a business that people would be going into, such as a property on a location that someone may be at harm if something did happen. I would be down to the business to make such the health and safety of the property is good enough for customers and employees are safe to go into.
Not just thinking of everyone else, the business also has TAX to sort out. The business has to think about what other TAXs need to be paid out of the money they get from income. National insurance is one of them. As national insurance benefits us all, business don't mind giving some amount of money to it.
When starting a business, its very difficult to decide what kind of support you want to do with money. Whether its a Grant, investments, loans and personal money. Most of them are difficult in different ways depeding how you are with your own financing. Grants are difficult to get hold of as you have to get your own funding for the government to give you money that you don't have to oay back. Investments are difficult as you have to get other businesses to invest and your own to get the money together which can take time. Personal funding can be possible depending how much you have and what your business is going to consist of. Loans is when you borrow money from the bank but you have to oay it back after a certain amount of days. This also includes added interest which makes it more money than you borrowed. The interest gets higher if you don't pay it back when it should be paid back. Its a prompt for you to pay it back on time I think personally.
When dealing with so much money in a business its good to keep organised. Businesses use system so that they can keep on track of what their finances are. Although you have to pay for this software in the long run they are able to keep on top of it. When it comes down to credit scores. They can easily be done with the uses of this.
I hope the information I have mentioned in this podcast has given everyone a better understanding of what it is like the start up a small business. Its not as easy as it looks or sounds.
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