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Some advice to get me started

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    Some advice to get me started

    Good morning all, I've been reading up on the world of contracting, and would appreciate some advice to point me in the right direction at this early stage.

    My partner (as in g/f) and I find ourselves in the position where we want to start contracting work on a daily rate basis. I will be IT contracting, she will be offering market research. It makes sense to me for both of us to bill to one new company.

    1) What would be the most beneficial type of company for us to start up? If it were a normal limited company, is it acceptable for me to be director, she to be secretary, and for both of us to bill against it? Or would we both have to be directors? In which case would an LLP be better?

    2) I assume that if we both work for the same company, we only need one accountant for the company, rather than one each?

    3) Does the fact that I am doing IT and she is doing research help me to steer clear of the IR35 laws?

    Many thanks in advance for any help you can offer.

    #2
    1. Normal Limited. If you are taking low wage high divs approach then you'd both have to be Directors. One can be the coy secretary as well as a director.

    2. Yes, but dont trade as one coy. I personally wouldnt bill through the same company. You may be besotted with her now but there is no saying that in 3 months time you havent found out that he has been banging the milkman. Business Life + Personal Life = Early Grave. Keep them seperate as they are too volative together.

    3. No. IR35 = Contract By Contract Basis. If you have multiple contracts then that helps but pretending that you are helping the S/O with market research isnt going to wash with Hector.

    Comment


      #3
      Hi Sockpuppet, thanks for your reply.

      To give a little more info, we are together 7 years, so I would hope there wouldn't be too much of a conflict between personal and business life, but I see what you're saying!

      In reality, I am hoping to be contracting full time. She has the opportunity of working on a more occasional basis, while she persues other interests like studies, but it would obviously suit her and her employers to bill against a company rather than her directly. So we thought, well let's bill against my company.

      Does that have any bearing on your answers?

      Comment


        #4
        you might want to think about how you split the company shares - doesnt have to be 50:50

        tbh I think the worries about fall outs and splits arent a big deal as long as you never have loads of cash in the company. everything else for a bos contractor is just one contract at a time, if problems then just start another co. maybe get somthing written into the articles ?

        Comment


          #5
          Exactly - I really don't think that will be an issue.

          I'm simply more concerned with the basics right now - what kind of company would best suit our needs, and whether we need to name us both as directors, things like that.

          Comment


            #6
            If you want to both have dividends and take adavantage of both having a lower tax threshold you would both need to be directors. Also I would go a Ltd route as LLP are ok but usually only done with people having a reason to go that way (think accountants, lawyers as they are banned from being a Ltd?).

            Comment


              #7
              Originally posted by Sockpuppet
              If you want to both have dividends and take adavantage of both having a lower tax threshold you would both need to be directors.
              Why? Dividends are paid to shareholders, not directors. A director doesn't have to be a shareholder and a shareholder doesn't have to be a director.

              As to the question of the OP - whether you should both bill from the same company or have 2 companies, I'm not sure if it would cause any issues using a single company given that you both are in completely different lines of business. I made an enquiry with my accountant about exactly this issue - and his response was that it was not a good way to do it. In the end my requirement to do it disappeared, so I didn't pursue it, but it might be worth speaking to an accountant for advice.

              Comment


                #8
                Originally posted by martinb
                I made an enquiry with my accountant about exactly this issue - and his response was that it was not a good way to do it. In the end my requirement to do it disappeared, so I didn't pursue it, but it might be worth speaking to an accountant for advice.
                I guess it depends on your accountant on what they advise. I am MD of my company, which provides IT consultancy services and also handmade cards and wedding stationery! I do the IT, my wife does the cards - although she isn't a shareholder, while she builds up her side of the business. She does draw the same salary as I do though.
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                Comment


                  #9
                  Originally posted by martinb
                  Why? Dividends are paid to shareholders, not directors. A director doesn't have to be a shareholder and a shareholder doesn't have to be a director.
                  Thats what I said....just my...errrr.....speech recognition software wasnt working correctly...



                  Phew....good save.

                  Comment


                    #10
                    Hello again all, just a quick question.

                    I think I've done all the groundwork and am ready to set up the company.

                    Can I do the whole thing online? How much time would I need to set aside for doing so? I don't want to start it, then find out it takes ages and not complete it!

                    Thanks.

                    Comment

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