SETTING UP A LIMITED COMPANY WHILE IN EMPLOYMENT

Several people aspire to start their own business, but they feel stuck in a full-time job. They intend to break the chains which hold them to employment and prevent them from doing something different.

Besides, it is quite challenging to set up a new business. It is unchartered territory, and you need to consider many factors before venturing into the unknown. In a scenario where you work full-time for a company and plan to set up a new venture, such pressures can be quite intense.

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REVIEW YOUR EXISTING EMPLOYMENT CONTRACT

Before taking an important decision to start a new business while in employment, we highly recommend going through your job contract to check for unfavourable clauses. You may watch out for any terms and conditions that may prohibit you from starting any business while working for the organization. Moreover, there is a possibility of some conflict of interest too.

CONSULT THE HUMAN RRESOURCES DEPARTMENT

In such a situation, you may consult the HR department of your company. Usually, responsible HR handles such inquiries with the utmost care by ensuring confidentiality. You needed to be extra cautious about finding out that you don’t breach your employment contract inadvertently. It is the last thing that you would like to happen and face unwanted termination notices.

If you don’t have so much time to research all the ifs and buts, we suggest you download our entrepreneurship guide here, which provides several more tips for people like you who intend to begin their freelancing career.

HAVING THE INTEGRITY

Several stealth startup aspirants never discuss their business ideas with their bosses. They quietly keep working on their business ideas. They put in their papers the moment they feel that their new business can support them financially. It may seem to be an attractive way of going about your new business but let me tell you that it is not a correct strategy.

We always recommend aspiring entrepreneurs to discuss with their bosses. Remember that starting a new business can change your employment status. You may not keep your activities confidential for long. If you register yourself as a director of a limited company, it becomes public information. An apprehensive employer can search about you on the Companies House website and find the truth about your new business almost instantly.

But nowadays, employers are becoming supportive of their employees who have business insights. They even help employees in realizing their dreams. It is becoming more of an exception than a rule to support staff running side-projects. You may try to explore your work benefits. Ask your employer if they can allow flexible working hours or reduce the number of working hours. They may agree it will not affect your day to day work.

WHO SHOULD YOU TELL?

It is natural to feel excited about starting your own business, and you would like to share your experiences with someone. It is your individual decision to tell your co-workers or not. They may not be supportive or discourage such behaviour. They may also be jealous of you, and it could lead to conflicts. However, it may be precisely the opposite as well. They may support and encourage you and help out of the way. You need to take a call as per the circumstances.

WORK WITH OBJECTIVITY

You may be super excited to leave your full-time job to devote more time to your business. But don’t forget that you are still working for that company. It would help if you showed full respect to your colleagues and bosses. Never work on your business idea during office hours. Never burn the bridges. Keep good terms with your colleagues and employers. You don’t know what will happen in the future, and you may have to fall back upon the same set of people for support in an emergency.

PLANNING WORK AND LIFE BALANCE

It may be quite challenging to juggle between two jobs. Ensure a balance between work and life by finding time for your loved ones, friends, family members.

If you work overtime, you may damage both your job and business. If you devote more time to one of the two, you are sure to harm the other. If you somehow fail in business and want to rely on the job where you have been underperforming. It will be so stressful. That’s why you should maintain a work-life balance that suits you. You may choose to devote a week a month or evenings or weekends. Whatever it is, ensure to allocate some time for family and yourself to relax and recharge.

GM Professional accountants have offices located in London, Birmingham and Manchester.

Accountants confirmation statement overdue filing tips

WHAT IS A CONFIRMATION STATEMENT?THE DEFINITION OF A CONFIRMATION STATEMENT

The confirmation statement is an annual mandatory submission requirement for all the LLPs and limited companies. They have to file these confirmation statement documents at the Companies House every year.

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The submission requirements are slightly different for both types of entities, as mentioned above. For instance, if it is a company, the confirmation statement must include its directors’ and shareholders’ required information.

On the other hand, if you talk about LLPs, the confirmation statement must list all its members’ relevant details.

However, for both the LLPs and limited companies, the confirmation statement document also needs to mention the business’s registered office address, in addition to other information.

Earlier, these entities used to file the return at the Companies House annually. Mostly, they used to submit the said return on the anniversary date of the business’ incorporation. Now, the confirmation statement has taken the place of such annual returns.

Confirmation statement at companies house

The confirmation statement also provides critical business leadership statistics like the details they used to provide in their annual returns.

The statement document provides a yearly summary of its management and business owners. The confirmation statement submission requires payment of yearly filing fees along with all the details mentioned above.

Please note that this confirmation statement is a document that is entirely separate from the business accounts.

Similarly, it is also not to be confused with the company’s corporation tax returns.

SUMMARY OF WHAT IT INCLUDES:

* · The details of directors and shareholders (For Companies)

* · The list of members (for LLPs) * · Registered office address (For both companies and LLPs) SUMMARY OF ITS SALIENT FEATURES:

* · The directors or members file it annually, typically on the anniversary date of incorporation

* · Replaces the erstwhile annual return

* · It includes a summary of its management and owners

* · It requires payment of yearly filing charges

* · It is separate from Corporation Tax return or business accounts.

FREQUENTLY ASKED QUESTIONS (FAQS) Here are the two most important frequently asked questions about the mandatory submission of a confirmation statement to the Companies House every year.

Q. WHAT’S THE DIFFERENCE BETWEEN THESE TWO TYPES OF DOCUMENTS: AN ANNUAL RETURN AND A CONFIRMATION STATEMENT? ANS.

There are three critical differences between the earlier system of filing annual returns and the existing system of submitting a confirmation statement document every year.

1. TIME OF FILING THE DOCUMENTS Earlier, the companies used to file the annual returns on the date of incorporation. Now, the directors or members of a limited company or LLP have the flexibility to submit the confirmation document at any time. The only condition applicable is the time limit of 12 months and 14 days. They must submit the confirmation statement to the companies House within the set time frame of a little more than a year.

2. SUBMIT ONLY THE CHANGES DURING THE YEAR It is one of the most important differences between the two. Earlier, it was mandatory to file the annual return every year even if there was no change in the information. The directors or members of listed companies or LLPs had to report the same details every year, even when there was no change.

But in the case of confirmation statement, the company can now submit a simple note stating that there were no effective changes this year. It is now acceptable to present only the changes or a statement of no changes in the said period.

3. PERSONS WITH SIGNIFICANT CONTROL Finally, the confirmation statement stipulates the submission of a PSC list (persons with significant control). The persons in this list are those people who may not be the directors, but they may be having a minimum of one-fourth (25%) stake in the business. Earlier, there was no such requirement in the annual return.

Q. WHAT HAPPENS IF THE COMPANY FAILS TO FILE THE CONFIRMATION STATEMENT IN THE STIPULATED TIME? ANS.

As such, there are no penalties for the late filing of the confirmation statement. Still, if you fail to submit the confirmation statement to the Companies House, it may initiate legal action. The Companies House is free to take such legal action against the directors, and in extreme cases, it can also strike off the company name from its register.

Please note that they take such legal action only if the directors or members do not file the confirmation statement after the due date.

Gm Professional Accountants can help you file your confirmation statement.  We have offices located in London, Manchester  Birmingham and Essex.