Posts Tagged ‘company startup’
What is a company?
A limited liability company is a legal entity registered with the Government. It is widely accepted as the preferred structure for conducting business under. A company carries many advantages with it as well as some legal obligations that company Directors must adhere to.
Limited companies exist in their own right, distinct from the shareholders who own them. This means their finances are clearly separated from the personal finances of their owners.
Shareholders may be individuals or other companies. They are not responsible for the company’s debts (unless they have personally guaranteed a bank loan, for example). However, they may lose the money they have invested in the company if it fails.
Management and raising finance
A director or board of directors make the management decisions.
Finance comes from shareholders, borrowing and retained profits.
Public limited companies can raise money by selling shares on the stock market, but private limited companies cannot.
Records and accounts
Accounts are filed with the CRO.
The directors and secretary are responsible for notifying the CRO of changes in the structure and management of the business.
Profits are usually distributed to shareholders in the form of dividends.
Liability -Shareholders are not personally responsible for the company’s debts, but directors may be asked to guarantee loans to the company.
Choosing a name for your company
Choosing a name for your business is a creative and enjoyable process. It is also one that you need to get right. Customers will deduce a lot from your business name and first impressions count.
While it may be tempting to try to stamp your individual personality on your business name, there are many other issues to consider. Being objective and choosing a name which reflects your business strategy can be more valuable, especially as your business develops.
Creating the right impression
When you are generating ideas about a business name, you initially may want to focus on personal preference. However, an objective approach will enable you to consider the customer first.
Remember that your business name will be the cornerstone of your brand. It should work well wherever you use it – on the phone, in your logo, signage, stationery, advertisements, website, uniforms and any other media you plan to use to reach the market. See our guide on branding: the basics.
Points to help you decide on a name for your business
Do you want the name to reflect what your business does – framing, moving, cleaning, building? Or would something more abstract be suitable?
Would it be a good idea to include your own name?
Do you want a traditional-sounding name, conveying durability and old-fashioned values, or a modern name, suggesting a fresh, innovative approach?
Think about the future – avoid words or phrases that are likely to date quickly.
If you’re likely to be trading overseas, check that the name doesn’t mean anything inappropriate in the relevant languages, and that it can be easily read and pronounced.
Think about callers and customers – avoid very long names, strange wordings and unusual spelling.
Company names – the rules
To make sure your company name is acceptable, work through this list before you send your application to CRO. Ensure that:
your company name ends with limited, or Irish equivalents – this must not be used anywhere other than at the end of the name
the name isn’t offensive
the name isn’t the same as – or very similar to – one already in the register
the name doesn’t include any sensitive words or expressions – unless you have obtained permission to use them
New Business Startup Idea. Where do I start ??
All Businesses start with an idea!, How do you find the right one??
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Why people dont start their own business…..Some real reasons
(Extract from article BR Dowling)
1. Some people just don’t want to…great no issue, being an entrepreneur is not the be all and end all. The majority of people who work for themselves work extremely long hours just to get by. Many many others try and fail. Unless you are an extremely unbalanced individual most of us know that the ultimate goal is to lead a happy and fulfilled life during our short allotted time on planet earth. What is a happy and fulfilled life is for each and every one of us to define for ourselves. It is ones of life’s great gifts that we get to set our own standards and goals the fact that many people choose badly and end up miserable is outside the remit of this article. The fact remains that your family, peers, colleagues and every dog on the street may be telling you that fulfilment lies in money/ fast cars/ high profile promotions etc. You are free to decide that for you its flip flops a surf board and enough cash to get by. Screw them it is your life…if you can achieve true happiness for the majority of your life you my friend are the real winner in this silly little game.
2. The Fear Factor…. Given that you are reading an article like this you probably are not surfing at the moment, so you think that you want a crack of the entrepreneurial whip. Ok then. The Fear Factor holds more people back from starting their own business than probably anything else. The old ‘what if’ deamons have caused millions of would be entrepreneurs to turn back and walk away from the scary dark edge with its lurking dangers and uncertain hidden treasures. For its sheer ability to slay ideas and dreams the fear factor remains the number one reason that people do not give it a go.
3. People are lazy…..Sad but true may people would kind of like to be successful but will never make the effort to actually make it happen. It is so much easier to talk about doing stuff and to wait ‘till the time is right’ than to actually go for it. If you are in this category please take the following advice. Admit it to yourself!!. By giving up the game you will take the pressure off yourself, focus on something else that you enjoy and get on with your life. This may seem harsh but it is a case of being cruel to be kind. There is a window of opportunity in everyone’s life to start their own business, this is not age specific but for every Colonel Saunders who founded KFC in his sixties there are hundreds of people who put themselves financially and physically at risk at a time in their life when they should be looking to retirement. There are exceptions to every rule but being successful involves being smart and realistic.
Important note: beware the disgruntled would be entrepreneur, this is a dangerous breed that will be full of stories about how they nearly invested in this or that that would have made them a fortune. They nearly patented some form of widget that would have been a runner etc. Avoid at all costs, they will have nothing positive to say about your plans but will be able to tell you how they tried ‘something like that’ and it didn’t work out. They will hate to see you succeed, you don’t want to be around this kind of energy.
4. People lack personal confidence and therefore (they think) the ability to run a business. A lack of personal confidence will kill the entrepreneurial spirit in those afflicted by it. It undoubtedly has other negative implications on their life but again these falls outside the purpose of this book. Entering the battleground of business with little or no personal confidence or self belief is as stupid as it gets. Sort it out…life is too short.
Two of the most frequently asked questions for people looking at a startup scenario are:
1) How do I setup a company, and
2) What type of company should I set up
How do I set up a company?
The Companies Registration Office (CRO www.cro.ie) is the government body responsible for registering all Irish businesses. The offices are on Parnell square in Dublin opposite the entrance to the garden of rememberance. The staff are generally quite helpful and will be able to point you to any forms that you will require. The CRO have a very good website and most things can be now done through their online filing system.
An easier alternative is to use the services of one of the many formation companies that will register the company on your behalf. They will provide you with a company seal (required for many legal docuements such as leases etc.), articles and memorandum of association etc.
Note: Do not be tempted to rush through this stage in your enthusiasm to get started!! The name of the company, list of Directors and Shareholding structure of the comapny, naming of Chairperson, secretary etc are extremely big decisions and should not be taken lightly. For example if down the road you fall out with your partners these details will be deciding factors in who has the upper hand legally!
A formation company will charge about €300 to register the company on your behalf. I have used www.formations.ie and found them to be very professional.
What type of company should I set up?
For most people the choice is either Sole Trader Or Limited liability company. Your accountant should advise you on the best structure for you. Generally speaking sole trader suits an individual running a business primarily on their own i.e A window Cleaning service, Painter etc. It can be a good idea to start the company as a sole trader and then move on to Limited liability if the business grows and more people become involved. The paperwork requirements for a sole trader are significantly less than for limited liability companies.
The idea behind a limited liability company is that an entity (the company) is seperate from the directors and shareholders. For example if a company does not pay its bills the company is sued not the directors. In reality, particularily in the current climate, most suppliers will look for personal guarantees from directors of the company before they will supply. This negates the protection of the limited liability. If a number of people are involved and if the company turnover is likely to be significant than forming a Limited company is recommended. It is important to be aware however that the filing and returns required by the CRO for limited companies are taken very seriously. If you are late with annual returns, significant fines will build up, also companies are entitled to an audit exemption for the first few years. If you do not file your returns on time you will lose this exemption. Furthermore shutting down a limited company is quite difficult and costly (you need to put an advertisement in the paper etc!!). Many people ignore the boring responsibilities of setting up a company in their initial enthusiasm, unless you are aware of your obligations you will find yourself and fellow directors spending lots of money on accounting audits and fines. If you put your head in the sand and ignore your CRO obligations , the company may be handed over to the Office of Corporate affairs who have the power to prosecute companies who breach the regulations. Don’t say I didn’t warn you !!!
