In through the outfield

Get Legal Clarity on what type of company you should form

I am often asked what type of company an entrepreneur should form. As with so many of these topics, the answer is, it all depends. So it is great to see the good folk at Legal Clarity (who aim to ease the burden of legal and regulatory obligations) has produced a nice clear guide to the options which I have copied below.

1. Standard Limited Company

   The overwhelming majority of companies registered at Companies House are standard limited companies (more formally known as private companies limited by shares).

   If you are forming a company with a view to making a profit then a standard limited company is probably appropriate for your needs. We would recommend that you do not form a Company Limited by Guarantee or a Public Limited Company unless you have a specific reason for doing so.

   Features of a standard limited company:

   1. Benefits from Limited Liability.
   2. Suitable for most commercial purposes.
   3. It only requires one person to form this type of company.
   4. Does not require a Company Secretary.
   5. Is not obliged to have its accounts audited by an accountant if it is a small company.
   6. Can be converted into a Public Limited Company at a later date.

   
   
2. Company Limited by Guarantee

   This type of company is suitable for non-profit making organisations such as voluntary groups, sports clubs, political organisations, and for one off or recurring events such as non-profit festivals and fairs. Companies limited by guarantee formed through Legal Clarity are not Charities, and are therefore not subject to the additional regulatory requirements imposed on Charities.

   The members of companies limited by guarantee (the equivalent of shareholders of a normal company) are not permitted to extract money from the company, even if the company has surplus funds.

   Features of a company limited by guarantee:

   1. Benefits from Limited Liability (each members’ liability is normally capped at £1).
   2. No initial investment is required for this type of company.
   3. This company can only carry out activities to meet objects specified on forming the company (for example ‘to provide a sports club for the local community’).
   4. This type of company does not issue shares or have shareholders.
   5. It only requires one person to form this type of company.
   6. Does not require a Company Secretary.
   7. Is not obliged to have its accounts audited by an accountant if it is a small company.
   8. You CANNOT convert this type of company into a Public Limited Company.

   
   
3. Public Limited Company (PLC)

   It is rare for a company to start its life as a Public Limited Company. PLCs are normally formed by converting an established standard limited company into a PLC.

   A key feature of PLCs is their ability to offer their shares to the public (if certain conditions are met). Standard Limited Companies cannot do this.

   PLCs are subject to more onerous regulation than standard limited companies. They are typically larger and longer established than standard limited companies.

   Businesses sometimes become PLCs for the prestige of identifying themselves with larger and longer established companies; these companies are referred to as ‘vanity PLCs’.

   Features of PLCs:

   1. Benefits from Limited Liability
   2. Requires at least two directors.
   3. Requires a company secretary, with specific qualifications.
   4. Requires a minimum initial investment of £12,500 with an obligation to pay a further £47,500 at a later date.
   5. Requires a Trading Certificate confirming the above initial investment before the company is permitted to trade.
   6. Shares may be offered to the general public for sale (if certain conditions are met).
   7. PLCs are subject to more onerous accounting obligations. Including a mandatory annual audit.

   
   

Other types of business structure:

1. Sole Trader

   A sole trader is not a type of company, but rather an individual who trades on their own behalf.

   Sole traders are not required to register with Companies House. In order for an individual to set-up as a sole trader they simply need to start trading or carrying on business activities.

   Sole traders are obliged to register as self-employed with HM Revenue & Customs within three months of starting to trade.

   The most important point to note is that, unlike the shareholders of limited companies, sole traders do not benefit from the protection of limited liability in relation to their business. Sole traders are personally liable for all of the debts of their business without limit, which means that their personal assets are at risk.

   For further information about the positives and negatives of operating as a sole trader as opposed to a limited company visit our sole trader page.

The description of the above types of company only applies to companies formed by Legal Clarity. Companies formed by other organisations are likely to have different features.

For further guidance please read our About Companies page.

Librarians – No more excuses – says Stephen Abram

Stephen Abram is always a thought provoking speaker and his talk entitled No More Excuses, at last months SLA annual conference in Washington was no exception.

I am grateful to Woodsie Girl for reminding me of some of his salient points to add to my notes.

Stephen pointed out how the recent SLA funded alignment research had shown how our customers and managers often think more highly of us than we do. He wanted to know why librarians and information professionals are so shy about telling the world about how great we and our services are.

It makes him angry that we appear to be a profession of introverted complainers. This is not the way to survive and prosper during the current economic and future technological challenges we face.

How do we get to the next level?

Alignment research has shown others think more highly of us than we do.

Why are librarians and info-pro’s so shy about telling the world about how great we are?

Stephen quoted from You matter from Seth Godin’s blog:
• When you love the work you do and the people you do it with, you matter.
• When you are so gracious and generous and aware that you think of other people before
yourself, you matter.
• When you leave the world a better place than you found it, you matter.
• When you continue to raise the bar on what you do and how you do it, you matter.
• When you teach and forgive and teach more before you rush to judge and demean, you
matter.
• When you touch the people in your life through your actions (and your words), you
matter.
• When kids grow up wanting to be you, you matter.
• When you see the world as it is, but insist on making it more like it could be, you matter.
• When you inspire a Nobel Prize winner or a slum dweller, you matter.
• When the room brightens when you walk in, you matter.
• And when the legacy you leave behind lasts for hours, days or a lifetime, you matter.

Stephen said we had no excuses—only reasons, and that if you have two lists of innovation limiters and encouragers, which list is longer?
Think…what’s the difference between an excuse and a reason?
Here are our TOP TEN reasons why [we can’t do things].
10. Innovation sparks dissonance and discomfort.
9. Innovation increases the amount of seeming failures.
8. Results only show up long term.
7. More meetings.
6. CEOs conserve resources. Innovation requires more resources.
5. Innovation flies in the face of analysis.
4. The perceived absence of time.
3. Over-reliance on cost-cutting and incremental improvement.
2. Inability to enroll a committed team of champions.
1. Insufficient conviction that innovation will make a difference.

So, I leave you with this—DREAM BIG. There’s no excuse. Your impact is so great and
powerful that it would be immoral not to make your dreams come true. SLA is there for you on
an international basis to help you with those dreams and making a difference in the world. Live
and learn. Network and enjoy. Say “yes” every chance you get. Put yourself in the way of being
asked to volunteer. Say “yes” to SLA and more. Be part of the change you want to see. Choose
to have an impact, an important impact.

Big toys for big boys

It is often said that men are just boys in adult bodies. This seems to be the approach taken by Männerspielplatz, an amusement park for men that lets them get in touch with their inner construction worker (thanks to SpringWise for the tip-off).

For EUR 219, visitors to Männerspielplatz can shed their office trappings and get seriously dirty while playing with excavators, wheel loaders, Caterpillars, quads, Jeeps and more.

The park, which is situated in an old factory site just outside Kassel, Germany, offers 18 stations for visitors to enjoy to their heart’s content. Challenges include using a Komatsu Hanomag excavator to move huge stones; leveling the ground with a bulldozer; off-road riding on a Quad Unimog; and participating in an archery course. 

Participants must be at least 18 years old. A Class B license is required, and admission is limited to minimize waiting times.

I met the Prime Thinkers mentors

It’s been a busy few weeks for me recently (so much for a quiet summer). So I have quite a few events still to catch up on.

Our Meet the Mentors event on the evening of Tuesday 30 June was a great success, with around 30 mentors and 90 mentees. With a 3 to 1 ratio, and two hours to network, the mentees had plenty of opportunity to find subject experts to match their interests.

I took a group of the mentors around the Business & IP Centre before the event started, as many of them were not aware of the range and depth of our information and services. It was yet another reminder of how much work we still have to do to spread the word about the Centre.

Maurice Collins, the man behind our very popular Weird and Wonderful display last year was his usual charismatic self and reminded the audience of the expanding Prime Thinkers groups, and how all the money from the £100 fee goes to his Kith and Kids’ charity. Their aim is to empower families living with disability to overcome their social isolation and access the services they need.

Given the enthusiasm of my colleague Clare Harris who organised the event, I’m hoping this will be the first of many Meet the Mentor evenings.

Our Twitter followers go over 1,000

Last May I wrote about putting our toe into the water with regard to Twitter, The Business & IP Centre takes on twitter.

Since that time the amount of activity on Twitter (I can’t be doing with these modern lower case names) has increased almost exponentially. Even taking that into account, our recent move above 1,000 followers for the Business & IP Centre Twitter feed is pretty impressive. This is nearly half of the current following of the main British Library Twitter feed.

http://www.nickburcher.com/2009/03/twitter-demographics-and-usage.html

Inspiring Entrepreneurs – Surviving and thriving: controlling costs to boost your business

Another inspiring Inspiring Entrepreneurs event this evening with the title of Surviving and Thriving: Controlling costs to boost your business. You can catch the webcast of the event once it is posted up on our website.

Doug Richards the former BBC Dragon and founder of the School for Startups started by saying he wouldn’t be able to keep to his script. He had some great stories and a few gems such as, ‘if you are small, you will die if one customer doesn’t pay your bills’.

In other words the micro immediate level is the key, not what is happening to the economy at the macro level.

Forget convential wisdom, sales are marketing are the key – not cash flow. With sales – take the order, whatever it is! Don’t start a business with Kent Richards…(Doug’s brother, who he started his first business with).

Marketing – don’t spend money – Doug has an eight hour training day covering marketing techniques that don’t cost any money.

Nick Wheeler the founder of Charles Tyrwhitt shirts gave a very entertaining talk. He founded the business at University in 1986, and it took four years to double workforce from one to two. After another fours in they went bust.

‘This is the story of how a complete and utter idiot can build up a business.’

‘It’s all about having a belief in what you are trying to do. Every day you remind yourself of what you are setting out to do.’

84% of Charles Tyrwhitt staff say they have fun working for the company.

Critical Factors for Success:
The idea – Vision – Focus – Passion – Hard work – Patience

Compound growth is the key to long term success.

Heather Gorringe the founder of Wiggly Wigglers started with quote from Winston Churchill, ‘Success is going from failure to failure without losing enthusiasm’.

If you are running a small business you need to be both proactive and reactive. The key thing she is doing to survive the economic downturn is to ‘keep working harder’.

Johnny Martin is a business finance expert who runs a regular course in the Business & IP Centre on financial management.

Imagine you are in the Dragon’s Den – how would you answer their questions about your business finances?

He feels you can’t start too young, and gets his children to use duplicate invoice books in order to receive their pocket money via their PayPal account.

The second most common reason for businesses failing is poor financial management.

Documentation can be the undoing of a business. Please check if you have any undocumented agreements.

You need to know where you are financially.

Be able to look ahead (at least six to nine months). Don’t go for financial support at the last minute, you won’t get it. Use forecasting techniques.

Be able to understand the difference between variable costs and fixed costs, and how to calculate your gross profit and gross margin. To survive in these difficult times you need to protect your gross margin (the value you are adding).

Turnover is vanity, what is important is profit.

The presentations were followed by a varied set of questions:

What happens when a business fails?
The main cause is lack of focus. Manager think they can do anything and fail when they diversify beyond their competencies.

How should businesses use the web to market the products:
Google Adwords are the place to start. Find the right company to help you navigate your way for very little money. Big companies are getting ripped off. Doug Richards – Search Engine Optimisation is not rocket science. You can spend a boring weekend learning enough to know what you are doing.

Heather Gorringe – the web is a bit like your local pub – whether you are there or not people may be talking about you – online is the same – you need to be there to listen and respond to your customers.

Free guide to creating a brand

Thanks once again to the EnterQuest team for pointing out this guide to creating a brand.

It is a short but effective free pdf leaflet on brand creation, if and why you need one, tips on researching brands, and guidance on brand management and extension.

The only slightly odd aspect of the guide is the noticable lack of branding by its authors GREEN Communications. As you can see from this cover shot, their name is barely visible in the bottom right hand corner. You have to read all the way through to the end of the guide before coming across their logo and contact information on the back cover.

CiG – RIP

Irony is a tricky topic as Alanis Morriset discovered a few years ago.

And perhaps ‘tragic’ is a more appropriate term for hearing the news halfway through Wednesday night’s SLA Europe Summer Soiree to celebrate 100 years of the Association, that the City Information Group was no more.

As a member of the group for nearly 20 years, I was saddened to hear of its demise. As Tim Buckley Owen points out in detail, they had a distinguished past. I certainly found their educational sessions to be of great interest and relevance to my career development. And of course their summer and winter parties were legendary.

Melanie Goody (one of the founding committee members) also recalls its glory days when it boasted over 1,000 members, on the TFPL blog.

On her View from the Hill blog Sue Hill says it is ‘A time to weep for the departed and to celebrate the survivors.’

It will be interesting to see if the existing GiG membership decide to join one of the remaining information bodies and associations.

Complete our small business information survey and win an iPod Nano

I’m not normally one for offering inducements to read my blog… but, for a limited time only (July 17 2009)… you have the chance to win an iPod Nano courtesy of the British Library.

My colleague Nigel Spencer has created a 5 minute online survey giving participants an opportunity to help shape the future of information for small businesses.

The survey is part of a major study into how small businesses get the information they need to develop and grow. It is being carried out by the British Library on behalf of JISC (Joint Information Systems Committee).  The questions look at how and where you get information now, the problems you face and changes that you would like to see in the future.

The findings from this online survey will be published in the form of a statistical analysis and no responses will be attributed to individual businesses.

Survey Link:  http://www.surveymonkey.com/s.aspx?sm=FNU3R5eZlMTE7KhpyzcdOQ_3d_3d

Start-ups who think big

On my way home the other evening I noticed an unusual poster advertising the Daily Telegraph newspaper. The poster consisted of three of the photos below, and was a salient reminder of the humble beginnings of what are now household names.

Some of the entrepreneurs I meet have no greater ambition than becoming their own boss and making enough money to be comfortable. However, some have global ambitions right from the beginning. Last week I saw a client who has patented an invention which if successful could be in every home in the world which uses electricity.

BM 1930: Before it became a computing power house, IBM used to manufacture and sell machinery ranging from commercial scales and industrial time recorders to meat and cheese slicers.

Lamborghini 1955: Lamborghini started out as a tractor-building company in the Italian village of Sant'Agata Bolognese.

IKEA started here. Ingvar Kamprad, aged 17, set up Ikea in a shed in Smaland, Southern Sweden. From here he distributed Christmas cards, packets of seeds and pens.

Google started here. Larry Page and Sergey Brin set up Google as a research project while they were Ph.D students at Stanford University. In 1998 they moved into Susan Wojcicki's garage at 232 Santa Margarita, Menlo Park.

It pays to think big, The Daily Telegraph, Britain’s Broadsheet
It pays to think big is the Telegraph’s major new advertising campaign to promote Britain’s best-selling quality daily paper. It pays to think big, proudly celebrates the fact that the Daily Telegraph is the only quality daily paper in the broadsheet format – giving readers more coverage of news, sports and business.