Increased unemployment rate is stimulating more people to think about setting up a company and start own business. is rising every year more and more. It is true that setting up a company and being your own boss gives you countless opportunities, however there are disadvantages as well and you should consider all before setting up a company. Some of the drawbacks of owning a business are not having regular income, paid holidays or access to a company pension plan. There are no doubts that working for yourself can be rewarding, but there are many things you need to know before you take this step.
Take a look at our top tips that can help you when setting up a company.
Determine How You Are Going To Structure Your Business – There are three primary ways to set up own business:
- a sole trader (your business will be run and owned only by you)
- partnership (if you plan to run the business with more one or more individuals. Similar to a sole trader, however two or more people will run the business)
- limited company (your personal assets will be safe in case your business runs into financial problems)
Funding Your Business – Most people use their own savings to finance their business or get a loan from a bank. Some rely on government grants or a sponsor who is willing to invest in a new business with the hope to profit.
Set Up A Business Bank Account – If you are setting up a limited company, you must have a business bank account. Before setting up your bank account, you will be asked to show your business plan and compare current business accounts in order to get the best account transaction fees and credit balance interest rates. In case you are setting up a company as a sole trader, you are not legally required to have a business bank account. However, it is advisable to keep your personal and business finances separate.
Keep Proper Records – When setting up a company you will need to keep records of your business operations. You may do your own bookkeeping or employ an accountant or hire a company that offers bookkeeping services.
Insurance – Whether you plan to work from home or rent an office, you must insure all your business tangible assets. If you are running your business from home, it is very important to tell your insurer that you have business equipment in your home because your home insurance is designed to cover only your personal assets. If you employ one or several workers, you must take out employer’s liability insurance.
