Daily Operations

Session 2 - What structure & tools do you need

Congratulations. You’ve been muddling through for two months and I hope you’ve found online information about running and registering your company. This session is all about types of company and not going to prison!

The Government Stat a Business website gives some basic information about business types. We will explore the right fit for you and the sorts of records you need to keep to stay legal.

By this stage, you should have a basic spreadsheet with your business goals & current spend. Let’s make that stricter.

There are several basic types of business

• Sole Trader e.g. honest Sam’s Private Fire Fighting
• Partnership e.g. Mary & Daughters Car repairs
• Social Enterprise e.g. a charity
• Limited Company

We will focus on Limited Company - it’s the starting point for being a Global Multi-National.

A basic limited company

Fundamentals of Your Company Ltd.

• it is a legal entity that can be praised and sued just like a person. This is important in America.
• it is owned by the shareholders. The shares have value and are bought from the company. This affects voting
• it is incorporated by giving it a name and registering it at Companies House, along with Articles of Incorporation.
• the Article of Incorporation are the rules that your company will follow - e.g. who is on the board, how often who votes, who gets rich.
• it usually has a board that makes decisions on behalf of the company
• the board has a Chair and the board usually elects its members and coopts specialists as needed.

Money that will just flow out….

• Setting up
  • Generating your ‘memorandum of association’,‘articles of association’, ‘statement of capital’, ‘statement of guarantee’ and other required docs (0 - £££ depending on lawyers)
  • Registering your company at Companies House (£)
  • Registering your PSC - persons of significant control (£)
  • Registering a domain name (£ - £££ depending on the name)
• Operating the company
  • Business Insurance (£)
  • Third Party Liability Insurance (£ - £££ depending on product)
  • American Surcharge if you operate in America (££)
  • You may have to register for VAT if you invoice more than £90k

Key Decisions for starting the company

• Shares
  • How many shares & who holds them? This defines the company’s owners
  • Who are the directors on the original board - for the PSC form.
• Responsibilities
  • Who is going to look after the books & when do you balance them?
  • Who is going to take the lead for sales/marketing/recruitment/engineer/IT?
  • Who will be responsible for forecasting VAT, Corporation tax etc.

Goals for the next meeting

1. You need to have your first prototype ready for deployment
2. You need to have all the virtual setup costs & virtual build costs in the spreadsheet
3. Your spreadsheet needs to show that the virtual company needs to has been registered before your first Purchase Order is given and before you issue your first invoice
4. If you’re planning a website - mock it up in a powerpoint or use free website host - your choice