In this video I go over 10 Advantages in total for setting up a limited company vs sole trader - Watch until the end for the disadvantages too!
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7 Key Advantages Of Having A Limited Company + 2 bonus advantages and disadvantages of setting up a limited company vs sole trader.
1. Tax and Take Home
2. Distinct Entity
3. Limited Liability
5. Shareholders and Funding
7. Selling the Business and Succession
10. Splitting Income
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Very informative! Can you make a video on when to set up a limited company, especially if you are already employed and have a regular 9-5 job but starting an amazon fba business including affiliate marketing on a part time basis? Thanks for all the info!
Syeem Ahmed thanks mate. Would I still need to mess around with tax accounts even if the company doesn’t even go anywhere?
All the other comments are like a year old, perhaps the video maker has moved on from these lol
Yes the bank account registered to the business will be closed in approximately 6 or 7 months !
People do try that one to avoid taxes so....
Hope this was some help surprised the video maker didn't reply
Nice video, with the last one though, I'm not sure trusting your accountant with everything is necessarily an Advantage. As a business owner and shareholder I think it would be important to know what's happening in the company. If you trust your accountant too much you might not know everything that may be happening. For example, your accountant could be embezzling your profits. Personally I would just trust the accountant to prepare the accounts and not much else.
N.B: I do not imply that all or any accountants are fraudelant. Everybodys' circumstances are different. So always speak with an expert. I am not an accountant or financial advisor, and have never set up any company or ran a business before, Please don't take any of what I've said as any kind of Business or financial advice. Just giving an opinion.
Love your vids ❤️ do you have any recommendations on a uk business account? Would prefer to avoid high street as they take months to set up and less than perfect credit score 😬 I have read world first is a good option and wondered what your thoughts are! Many thanks
Great vid JB, V insightful. You pay your accountant once a year/ thats how often they tie everything up for you, to then just sign ? At what point did you commandeer an accountant -Once your company had been signed off with Companies House?
So do you have all your multiple streams of income going through 1 limited company? Or would you need to set up multiple limited companies for each business model for example fba, affiliate marketing, and other ones you could branch into like shopify etc.
yeah I've had a company for about 6 years now and it won't affect your tax unless you are earning an income as a PAYE or if you go over tax thresholds for income. For specific advice really you should just speak with an accountant though
Thanks this is helpful.
So if I wanted to buy some stock, and wanted to set up as a limited company presumably that means I'd need to buy the stock from the Ltd company bank account?
If that's the case, would i need to do things in the following order:
1) Come up with a company/brand name
2) Set up the company
3) Open a business bank account in the company's name
4) Buy the stock
Is that right, or is there flexibility in the order in which to do things (e.g. can rename the company later)?
+Paul Sheriffs you pretty much got it, however you don’t neeeeeeed the ltd set up when you order but personally I would set it up first so the manufacturer can invoice the company. And yes you can rename the company later, costs £10
I contacted different suppliers for their prices and can't seem to get a good profit right now..
My average product sales price is around 20€...So minus the VAT (4€), FBA fees (5.30€), shipping costs (0.5€), duties (0.60€), product costs (4.5€), and marketing fees (let's say 5% so 1€), I'm getting a total profit of 4.10€ on an initial investment of 5.6€.. And then I would need to hire a freight forwarder which would lower my profit again?
What am I doing wrong 😅🤔
So negotiating is important and that will always help. But make sure you have the VAT right, as for me in the UK I pay 20% on the import cost, then if I become VAT registered it gets a bit more complicated. so just check that you've got that right. It maybe a case that its just not a good product for a beginner entering the market at this point. Also is the product big and heavy?
I personally would say do it asap as you won't even be paying them until they actually do something for you, no harm in arranging meetings. Yeah so for me I did it actually before I had a business bank account.
Accounts are not as expensive as you think my brother it is a myth as well that the big man's dem have account...
My accountant gets paid around £250 a year
If you in UK I can make a couple of recommendations
Jonny Bradley thank you !! Do you only sell in the Uk or in the USA too ? I want to where (website) I can set up an bank account and LLc (Wyoming) in the USA as an international seller online. Keep going !!
+samueletofan9 LLC Is the same as LTD they are both Limited Liability companies. And no it’s not blocked, just delays on receiving shipments into the amazon fulfilment centres. Only accept ion is you can be a new seller I’m toys and games in q4
You mentioned in your previous video that you put most of your earnings to your company's bank account because you are tempted to spend it if it's in your personal account. That sound risky if your company is not insured?
Can be yes, you’ll want professional indemnity insurance and if you’re doing amazon; product liability insurance. HoweverC I restrict my earnings just as at this moment in time I need to reinvest not spend :)
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