Conrad11 said:
....
It would only be me in the company so LTD would be out of the question at the moment, plus I dont want to loose money preparing respots and accounts and stuff, so I think sole trader was what I was after, which is specifically why I thought that you would have to be at least 18 before you can be liable for anything, ie the debts of your comapny....
I won't guarantee to be absolutely right about this, but
as I understand it, if you are under the age of 18, you are deemed to be a minor and therefore not to have reached the age of responsibility.
This puts you into a grey area. You absolutely, certainly
can be held liable for debts ..... but not in all circumstances. As I understand it, you can only be held liable for "essential goods and services" bought on credit. But you most certainly can be sued. What liability you have if you get sued varies depending on circumstances.
But because of the above limited liability, it can be very difficult to get credit under 18, and you'll find that a lot of trade suppliers won't open accounts for under 18s .... unless they have an adult acting as guarantor.
The guarantor may get you out of this problem,
if you can find one. Parents are the obvious choice, but that means that you have to convince your parents that they are prepared to pay any debts you incur. It also means that any available credit will be based on their credit record, which may or may not be good, and that in addition to being liable for your debt, it's also their credit record at risk over this. So, like the decision about forming a limited company, this is not a trivial decision, and can have painful consequences.
Conrad, I'm not trying to put you off, and I'm not trying to be condescending with what follows. Please take it as constructive. People of your age have very limited experience of the world, and particularly of the business world. There is a large element of shark eat shark out there. As soon as you go into business, you open yourself a target for all sorts of people. This might be scammers who try to rip you off, it might be disgruntled customers or even deceitful ones, it might be competitors, predatory suppliers, and so forth. You need to have eyes in the back of your head and a generous portion of scepticism and suspicion about everything that happens, but you also need to keep that in balance, or you'll never do anything more than look nervously over your shoulder. Do you have finely tuned ******** antennae?
There's nothing whatever wrong with going into business at a young age, and certainly enough people have made successes doing so (including Richard Branson, Alan Sugar and Bill Gates, to name but a few). BUT .... watch your back!
Oh, and in your last post, you said you didn't want to lose money preparing things like accounts. Newsflash for you ... that isn't applicable just to limited companies. If you go into business as self-employed, you MUST notify the Inland Revenue that you have done so (and within a limited time period which, IIRC, is about 90 days). If you don't, you're liable for automatic tax penalties. As soon as you notify the Revenue that you are trading, you go on their list to get a self-assessment tax return. If you are simply employed by an employer, odds are you won't have to fill one of these out, as tax from dividends, employment, bank interest etc is all taxed at source. Unless your income goes into the 40% bracket, you probably won't need to fill one out. But if you are trading, you DO need to fill one out, regardless of whether you make a profit, let alone how much it is.
And you can't fill out a tax return unless you know what your profit or loss for the period was, and you won't know that unless you either keep accounts, or pay someone to prepare them for you.
The extent of accounts you need to keep is rather more minimal, but you DO need to keep them. For seven years (IIRC).
So, do you understand the difference between capital and trading items? One gets charged against your profits, the other doesn't, but allows you to claim capital allowances. In either case, your tax bill goes down, so you DO want to understand these. Do you know what expenses are "allowable"? Same logic. Get it wrong and you either risk trouble with the taxman, or you pay more tax than need be. So if you can't keep your own accounts, and aren't prepared to do the learning and put in the effort to do your own tax return (probably missing out on things an accountant would know you can claim), then you have to get someone to do it for you, and pay for the privilege.
I guess what I'm trying to say is that "starting a business" is distinctly more complicated than just buying a web hosting reseller account (or whatever your plan is), and banking the profits. You WILL have hassles, you MUST do the necessary administration, and it WILL be time-consuming and a pain in the butt, at times.
It can also be VERY rewarding, both financially and emotionally.
Not everybody is cut out for business. I suggest you think about what I've said. If none of the above warnings put you off (and I have stressed the negative aspects, not the positive), then it may well be that you have what it takes. If, on the other hand, you've read this and are thinking "bother that, sounds like hard work", then perhaps this isn't the route for you, because it IS hard work.
My personal opinion is that successful business people are usually a particular personality type. They are often driven, usually rather perfectionist (especially of themselves), they are resilient and often ego-centric, and not always nice people. If you don't have at least the ability to grow a tough hide, and to make hard decisions, it may not be for you. In fact, it isn't just making hard decisions, but the ability to make decisions at all. If you're a ditherer, forget about business. You need to be able to look at the situation, assess it, and actually make a decision. Both under and over analysing can be crippling. And if you get it wrong, you have to be able to learn from it and move on. Because you WILL make mistakes, and some of them will be expensive.
If this hasn't got you thinking "oh sh*te
", then good luck to you in your business endeavours.
