1. setting up a business Flashcards
What do you need to do before engaging new clients?
- CONFLICTS CHECK
- SEND ENGAGEMENT/CLIENT CARE/RETAINER LETTER
- BACKGROUND CHECKS including Money Laundering Check
- Request MONEY ON ACCOUNT (if worried about client’s creditworthiness)
- OPEN FILE (so you have a file number to record time)
- Consider if you need ANOTHER MEETING
Why CONFLICTS CHECK?
o(3.1)
CHECK IF firm is acting for:
- another party with whom the prospective client is in dispute
- or another party which might give rise to conflict?
What is in the ENGAGEMENT LETTER?
Details in writing of various things
- complaints handling procedure
- name of principal
- scope of work/expectations
- time scale
- how fees are calculated (hourly fees/fee estimate)
- costs (incl. party/party if lit)
SRA CODE: Chapter 1 client care
what BACKGROUND CHECKS?
- MONEY LAUNDERING CHECK (to comply with Money Laundering Regulations 2007)
- if you suspect an issue, speak with designated money laundering officer of your firm - IDENTITY CHECK
- CREDIT CHECK
What is a business plan for?
- contains key information so investors can decide whether to invest
- investor ensures business is financially sound (so it’ll get its money back)
what is in a business plan?
- appendix
- history/background
- mission statement/objectives
- product/services
- market information
- resources employed
- management
- financial info
- summary and action plan
- ways of generating profit
- target market, comp in market
- assets avaliable
- sources of finance
- personal guarantee?
Concern: ownership?
1 for each except
- partnership
- LLP
Concern: finance raising
hardest to easiest
sole trader partnership LLP Ltd PLC
Concern: immediate trading
no set up:
- sole trader
- partnership
registration:
- LLP
- Ltd
- PLC (and listing)
concern: privacy
least to most disclosure:
ST Partnership LLP Ltd Plc
concern: limited liability
unlimited:
ST
Partnership
limited:
LLP (only agreed amount)
Ltd
Plc
concern: tax
tax transparent:
- ST
- Partnership
concern: start up costs
PLC requires £50,000 share capital
partnerships - evidence of it
- profit sharing
- agreement to share loss and profits
partnerships - not evidence of it
- loan of money by one to another
- person not held out to be partner
clauses to include
- % of profits/cap
- salary
- decision
- leaving partnership voluntarily
- partnership prop
- removing partner
- liability for debts
- variation of Partnership agreement
public vs. private companies - key differences
- name
- SH
- directors
- CS req?
- certificate req to commence trade
- min share capital
- offer shares to public
- method of payment, min amount payable for SC
- AGMs
- WR
- Financial assistance
- purchase own shares out of capital
certificates required before commencement of trading - private vs. public
both: certificate of incorporation
also plc:
- trading certificate issued by registrar showing company’s allotted SC is not less than minimum
min share capital - private vs public
ltd: one share
plc: min £50,000
method of payment and min amount payable for share cap - ltd vs plc
ltd:
- no restriction on method of payment and
- shares can be issued without immediate payment
plc:
- payment in cash only or where consideration has been independently valued
- 25% of nominal value must be paid on allotment + whole of any premium
