Registering a company

ripoffthemonkey · 15 Dec 2010 at 19:22

Hello everybody.

I wondered if anyone on here has set up a company before, as I could do with a bit of advice.

I am manage and play in a band that is getting lots of gigs, so much so we need to go legal.

I have seen all these different "start up company" packages on the web offering a variety of different options. They all seem fine, just wondered if anyone has used them before.

Any advice on accountants Vs. Self book keeping? Im not a keen business man, but I think I could keep the books up to scratch.

I am sorry if this seems vague, I am still researching the whole thing. I thought I would ask OCUK as there seems to be some knowledgeable people on here. The 2 main forms of info come from HM Govt. which is a nightmare to understand, the the other seems to be from companies wanting to registering you for a fee, so slightly biased information.

Just looking for a bit of advice from anyone who has been down this road on what to watch out for essentially.

Thanks

dowie · 15 Dec 2010 at 19:29

Why would you want to register a band as a limited company?

[TW]Fox · 15 Dec 2010 at 19:30

Not really sure why you need to do this?

86JR · 15 Dec 2010 at 19:36

Your not providing goods or a service so why do you need a company ? Your providing music, and unless your band has bought a specific property just to "sell" music then the company or pub etc that hires you for the night has to pay tax, not you.

Paul11 · 15 Dec 2010 at 19:37

having a ltd company, which it sounds like you are talking about is only a benefit

a) for tax reasons (if you are earning lots of money and want to issue share dividends to help with tax)

b) to limit your liability in the event you get in to trouble

you need to be more clear on the reason you are wanting to form a company and see if the ltd route is the best route for you

you can always open a bank account for the band and keep records for transactions on a spread sheet (for now) without having a ltd company

twoblacklines said:
Your not providing goods or a service so why do you need a company ? Your providing music, and unless your band has bought a specific property just to "sell" music then the company or pub etc that hires you for the night has to pay tax, not you.

music is a service

if they play in a venue and the venue pays them , then the band has to pay tax on its earnings

Kemik · 15 Dec 2010 at 19:38

twoblacklines said:
Your not providing goods or a service so why do you need a company ? Your providing music, and unless your band has bought a specific property just to "sell" music then the company or pub etc that hires you for the night has to pay tax, not you.

No. He's self employed. Has to pay his own.

[TW]Fox · 15 Dec 2010 at 19:39

Paul11 said:
having a ltd company, which it sounds like you are talking about is only a benefit

Not really - it brings with it more legislative responsibility, the requirement to file accounts with companies house, etc etc.

The benefits are clear for most businesses but.. a band? Limited Liability is an appeal but what exactly is a Band going to do that would make this a big advantage?

Vonhelmet · 15 Dec 2010 at 19:39

Why do you need to "go legal"?

86JR · 15 Dec 2010 at 19:40

Kemik said:
No. He's self employed. Has to pay his own.

His own what ? Hes not selling anything ?

[TW]Fox · 15 Dec 2010 at 19:41

twoblacklines said:
His own what ? Hes not selling anything ?

They are selling services for which they are being paid. The band is paid to perform at the pub.

Vonhelmet · 15 Dec 2010 at 19:42

twoblacklines said:
His own what ? Hes not selling anything ?

If the band is paid by a venue to play there, or if they hire a venue to play and take ticket money on the door then... they have an income stream and must pay tax on it.

Kemik · 15 Dec 2010 at 19:42

twoblacklines said:
His own what ? Hes not selling anything ?

The pub pay him to play. My dad doesn't sell anything but he works for lots of different people as a mechanic and has to file self assessment.

daz · 15 Dec 2010 at 19:43

[TW]Fox;18010367 said:
Not really - it brings with it more legislative responsibility, the requirement to file accounts with companies house, etc etc.

This is a few hundred pounds a year at most.

The benefits are clear for most businesses but.. a band? Limited Liability is an appeal but what exactly is a Band going to do that would make this a big advantage?

The biggest advantage to registering a company will be the formalisation of different member's interests in the business (i.e. shares). It also means that they can be paid via dividends which tends to be much more tax efficient (e.g. no NI). I would imagine it also formalises the organisation of the band's finances and makes it easier to centralise expenses, costs and money coming in.

How much is the band turning over though? If it's not over a certain amount it's probably not worth the extra hassle.

86JR · 15 Dec 2010 at 19:45

So your going to have 5 directors (or how many band members there are) with equal share ?

Vonhelmet · 15 Dec 2010 at 19:46

daz said:
This is a few hundred pounds a year at most.

A few hundred pounds and a moderate pain in the arse.

daz said:
The biggest advantage to registering a company will be the formalisation of different member's interests in the business (i.e. shares). It also means that they can be paid via dividends which tends to be much more tax efficient (e.g. no NI). I would imagine it also formalises the organisation of the band's finances and makes it easier to centralise expenses, costs and money coming in.

The same can be done with a partnership, which is less onerous and much more flexible, as shares can be allotted without reference to capital invested. Paying dividends can be more tax efficient, true.

daz said:
How much is the band turning over though? If it's not over a certain amount it's probably not worth the extra hassle.

Key point right there.

Participant · 15 Dec 2010 at 19:51

Llp only if you trust your partners implicitly!

Paul11 · 15 Dec 2010 at 19:54

vonhelmet said:
If the band is paid by a venue to play there, or if they hire a venue to play and take ticket money on the door then... they have an income stream and must pay tax on it.

no, this is wrong

the venue take money at the door, then pays the band

take one away from the other and the venue pays take on its PROFIT

the BAND pays tax on its income (that is got paid for supplying a service)

Paul11 · 15 Dec 2010 at 19:55

[TW]Fox;18010367 said:
Not really - it brings with it more legislative responsibility, the requirement to file accounts with companies house, etc etc.

i was only talking about the benefits, i didn't mention the negatives

Vonhelmet · 15 Dec 2010 at 19:55

Paul11 said:
no, this is wrong

the venue take money at the door, then pays the band

take one away from the other and the venue pays take on its PROFIT

the BAND pays tax on its income (that is got paid for supplying a service)

Erm... Not sure that's any different from what I said.

daz · 15 Dec 2010 at 19:57

Speak to your accountant, the band may well be able to claim back certain costs. Possibly instruments (although they will probably come out of capital allowances), travel costs (as long as it's not from a "regular place of work") and so on. Key thing is to speak to an accountant. I am not an accountant.