Track 47

Track 47.

To conclude this lecture, I’d like to present three case studies to show the different structures in action.

I’ll present each case, briefly discuss the possibilities and recommend the most suitable structure.

Firstly, there’s the case of Sanjay and Tanya, a couple who want to set up a catering service delivering food to businesses.

The idea is to take orders from businesses on a daily basis and prepare food for delivery during the business day.

They aim to target businesses in their local area to begin with, and then further afield as they expand.

Their plans include a website to display their daily international menus and to provide an online service for customers to order and check when the food will be delivered.

Clearly, it’s not suitable to be sole traders, but they could organize themselves as a partnership or a limited company.

It depends partly on how much money they can raise and how many people they intend to employ to prepare and deliver the orders.

It might be best for them to start as an LLP, so that they can get funding more easily than if they were a simple partnership.

They could start small and build from there.

They could hand out contracts to other companies for some of their services, particularly for the website and delivery, if they intend to prepare the food themselves.

Alternatively, they could set up a limited liability company if they expect to grow quickly and want to keep every aspect of their business in-house, employing staff directly.

However, I would say the LLP model would work better here, giving them more time to focus on growing the business, rather than dealing with a lot of administration from the start.

Melissa and Jane have an idea for a website design service.

They both studied software engineering at university and so they are both well skilled in their field.

They have both worked as designers for major organisations, so they have a good understanding of what’s involved in running such a business.

Melissa has also taken a Master’s degree in Business Administration, so she’s confident about her skills as a businesswoman.

They’ve managed to save over £3,000 to rent office space and £10,000 to buy equipment to run their business.

The best option for them would be to register a limited company and start trading straight away as they have a good level of knowledge and experience which will benefit them.

They don’t intend to employ anyone immediately, but the option is there if they need to in the future.

An alternative would be for them to start as a simple partnership and expand from there, seeing how their work grows and then maybe setting up a limited liability company in the future (or they could make their partnership a limited one).

But if they have confidence in themselves, there’s nothing to stop them setting up a limited company immediately.

Barry is a motorbike enthusiast with many years of experience riding bikes.

He’s been working for a courier company delivering letters and parcels for over five years now and thinks that he’d do better if he worked for himself.

The courier company provided him with his work bike and took care of maintenance and repairs, so if he works for himself, he’ll have to buy his own bike for work and take care of it himself.

This isn’t a problem for him as he has three bikes for his own use already.

He knows that he can build up regular clients from his contacts, but he’s not sure if working as a sole trader is the best thing for him, as he’s never been self-employed before.

Another possibility would be to set up a limited company with a family member.

This person wouldn’t take an active part in the business, they would be known as a ‘sleeping partner’.

Finally, he could also choose to work in a partnership with other riders who are thinking of leaving the company, but he’s not sure if that arrangement would last.

On balance, the best option for him would be to start off as a sole trader with his own work bike and do that for a year or two to see how well it went, and then make a decision about whether to set up a limited company in the future.