Passing on your home to your children

Passing on your home to your children

You can give your home to your children – or someone else – at any time, even while you’re still living in it. However, if your estate (including your home) is worth more than the Inheritance Tax threshold (325,000 in 2012-13), there may be tax implications. Inheritance Tax when passing on property For Inheritance Tax purposes, giving your home away is treated as making a gift. The rules about passing on property are complicated, so…

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Stakeholder pensions

Stakeholder pensions

Stakeholder pensions are flexible and portable and must meet strict government standards. They are available to the self-employed, contract workers, employees and the unemployed. It may be worth considering a stakeholder pension if you: are a moderate earner have an irregular income or low earnings but can afford to save wish to top up other pensions An independent financial adviser can help you identify the best pension product for you. Find out about stakeholder pensions on the Pensions Advisory Service website – Opens…

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If your records are lost or destroyed

If your records are lost or destroyed

If your records are lost or destroyed and you can’t replace them, you must tell HM Revenue & Customs (HMRC) what has happened and do your best to recreate them. Once you have gathered replacement information you use this to complete your tax return. You must tell HMRC whether any provisional figures are: estimated figures – you want them to accept these as final figures provisional figures – you are using these until you can…

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Help and advice

Help and advice

Follow the links below to find out more about Statutory Paternity Pay (SPP). Statutory Paternity Pay: an overview Download E19 Employer Helpbook for Statutory Paternity Pay from the HM Revenue & Customs (HMRC) website (PDF, 270K) – Opens in a new window. Find information and frequently asked questions on SPP on the HMRC website – Opens in a new window. If you still can’t find what you need, you can ask a question through HMRC’s email query service….

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Working hours and young workers

Working hours and young workers

If you are a young worker or a child worker, you have different employment rights from an adult worker. You get longer rest periods and more protection from night working. Unlike adult workers you cannot opt out of these protections. Young workers and child workers The number of hoursyou can work and the types of jobs you can do will depend on your age. If you are compulsory school age you areclassed as achild worker….

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Employment rights for young people

Employment rights for young people

Are you thinking of getting a job? Are you already in work? If you are employed and under 18, there are certain restrictions on what work you can actually do, where you can do it and for how long each week. Are you old enough to have a job? If you’re under 13, you cannot legally be employed, although you can take part in paid sport or entertainment with permission from your local authority. Once…

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Starting work

Starting work

If youre starting your first job, there are a few things your employer will give you. They will help you perform your job safely and answer all your questions about your new workplace. Contracts of employment When you accept a job and become employed by someone, there is always a contract between you and your employer. Although it doesnt always have to be in writing or signed, this contract covers your basic rights at work,…

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Your rights and responsibilities at work

Your rights and responsibilities at work

Working hours and young workers Find out about the regulations that control the working hours and rest breaks of young workers Employment rights for young people A summary of all the employment rights that people under the age of 18 should be aware of Starting work: what to expect Your first day at work can be a bit confusing, so it's a good idea to know what will happen before you get started Employment rights…

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Basic employment rights

Basic employment rights

Your employment rights are protected by law to stop you from being exploited or treated badly. Find out more what your basic employment rights are and where you can go for help and advice if you have a problem. Pay and Work Rights Helpline Pay and Work Rights Helpline The Helpline takes calls in over 100 languages – telephone 0800 917 2368 The Pay and Work Rights Helpline can help you with questions or complaints…

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The costs of a franchise

The costs of a franchise

When calculating the likely cost of a franchise, you need to take both initial and ongoing fees into account. Initial costs The franchisor – the business that sells you the franchise – usually charges an . If the franchisor relies mainly on taking a percentage of your sales revenue, rather than on a high initial fee, it is usually a good indication that they have confidence in the value of their product or service. Your…

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Assessing business value

Assessing business value

Buying anything for the best price is a matter of skilful negotiation. But if you are considering an acquisition, it is advisable to apply one of the following methods of valuing the target business. Even if you are only considering a merger, you should be aware of how much the other business is worth. Net asset value This is the value of the business’ assets as stated in the audited accounts, minus outstanding liabilities to…

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Limited companies with a social purpose

Limited companies with a social purpose

The limited company is an organisational structure which gives limited liability to its members. Some social enterprises take on the form of a limited company. This is a more accountable form than, for example, an unincorporated association. Limited companies have an ‘objects’ clause that sets out the company’s aims or purposes. Although these objects can be commercial, if your business is , they may relate to social and/or environmental objectives such as regenerating an area…

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What is a sole trader?

What is a sole trader?

A sole trader, put simply, means a person who is self-employed. It describes any business that is owned and controlled by one person, although they may employ workers. It is the simplest way to run a business, although there are inherent risks. The basic legal structure A sole trader makes all the decisions on how to manage his business and will raise money for the business out of his own assets or with loans from…

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Checklist: setting up and registering a limited company (private or public)

Checklist: setting up and registering a limited company (private or public)

Checklist: setting up and registering a limited company (private or public)

As well as registering your business as a company, there are several other things that you need to do to put it on a proper legal footing. Make sure you: Display your company’s name so it can be clearly seen by all visitors to its offices or other places of business. Display your company’s name clearly on all its business stationery, including letters, invoices, receipts and cheques. Show your company’s place of registration, registered number…

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What is franchising?

What is franchising?

The term ‘franchising’ can describe some very different business arrangements. It is important to understand exactly what you’re being offered. Business format franchise This is the most common form of franchising. A true business format franchise occurs when the owner of a business (the franchisor) grants a licence to another person or business (the franchisee) to use their business idea – often in a specific geographical area. The franchisee sells the franchisor’s product or services,…

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Ending a joint venture

Ending a joint venture

Your business, your partner’s business and your markets all change over time. A joint venture may be able to adapt to the new circumstances, but sooner or later most partnering arrangements come to an end. If your joint venture was set up to handle a particular project, it will naturally come to an end when the project is finished. Ending a joint venture is always easiest if you have addressed the key issues in advance….

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Social enterprises as registered charities

Social enterprises as registered charities

Many social enterprises have charitable status. It is only possible to gain this status if the purposes of your organisation are exclusively charitable and are for the public benefit. Charitable purposes include advancing education or religion, and relieving financial hardship. Over many years, a host of other charitable purposes that benefit the community have been recognised as charitable by the courts or the Charity Commission. Organisational restrictions A charitable social enterprise must have exclusively charitable…

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Joint Venture Agreements

Joint Venture Agreements

A joint venture is when two or more businesses bring together resources and expertise in order to achieve a particular joint goal. A joint venture agreement is often made when businesses want to work on a specific project together for a specific length of time, but do not wish to establish any long-term commitment. If you are interested in entering into a joint venture agreement, you may wish to consult a solicitor with regards to…

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Benefits of a merger or acquisition

Benefits of a merger or acquisition

There are many good reasons for growing your business through an acquisition or merger. These include: For instance, a business with good management and process systems will be useful to a buyer who wants to improve their own. Ideally, the business you choose should have systems that complement your own and that will adapt to running a larger business. Better production or distribution facilities are often less expensive to buy than to build. Look for…

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Is franchising right for your business?

Is franchising right for your business?

Many businesses have used franchising successfully, including well-known names like McDonalds, Prontaprint, Domino’s, Molly Maid, Thorntons, Snap-on, Rosemary Conley and Select Appointments. However, franchising doesn’t suit every business. To start with, your business needs to be successful. Nobody will want to buy the right to franchise a business that doesn’t make money. A franchised business needs to be profitable enough to make money for both the franchisee and you. More broadly, your business needs to be…

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Make your joint venture relationship work

Make your joint venture relationship work

A clear agreement is an essential part of building a good relationship. Consider these ideas: Get your relationship off to a good start. For example, you might include a project that you know will be a success so that the team working on the joint venture can start well, even if you could have completed it on your own. is a key part of building the relationship. It’s usually a good idea to arrange regular,…

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Charitable incorporated organisations

Charitable incorporated organisations

From spring 2010, you should be able to set up as a charitable incorporated organisation (CIO). This legal form is specifically tailored for charities registered in England and Wales. It will be available to new organisations and existing charities that wish to convert into the CIO form. Converting to a CIO  Under certain conditions, the following organisations may be able to apply to the Charity Commission for conversion to a CIO through a special conversion process:…

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Top 10 reasons to avoid breaching contract

Top 10 reasons to avoid breaching contract

No doubt you’re aware that you shouldn’t breach a contract, but just to make it clear here’s our list of ten reasons why you really shouldn’t do it: 1. If you breach a contract, you could be liable for damages to compensate the other party. The basic remedy for breach of contract is damages. If you breach a contract, you may have to compensate the other party for the loss they incur as a result…

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What can go wrong with a merger or acquisition?

What can go wrong with a merger or acquisition?

The extent and quality of the planning and research you do before a merger or acquisition deal will largely determine the outcome. Sometimes situations outside your control will arise and you may find it useful to consider and prepare for these risks. An acquisition could become expensive if you end up in a bidding war where other parties are equally determined to buy the target business. A merger could become expensive if you cannot agree…

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The benefits of franchising your business

The benefits of franchising your business

Growing your business can be difficult and expensive. The more you grow, the more capital you need, for example, to finance new outlets. At the same time, managing the business becomes more difficult, particularly if your business is spread across the country. Franchising helps overcome these two problems. Finance Each ‘franchisee’ finances their own outlet themselves. While the franchisee meets all the costs and collects the income, you receive franchise fees from the franchisee or…

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Heres how I made a joint venture successful

Heres how I made a joint venture successful

Michael Henderson worked as a subcontracted electrician for a house building business in the 1980s and 1990s. He always worked alongside another subcontractor, Dave Harrison, a plumber. When the house builders went into liquidation in the middle of a building project, it left both Michael and Dave with no work. Out of this crisis the joint venture of Henderson and Harrison began. Michael explains how they went about it. Join forces with someone else so…

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Community benefit societies

Community benefit societies

Community benefit societies (BenComs) are incorporated industrial and provident societies (IPS) that conduct business for the benefit of their community. Profits are not distributed among members, or external shareholders, but returned to the community. For example, a nursery school might use this form to let staff take part in decision-making. How BenComs operate As IPS, some key characteristics of BenComs are as follows: They are set up with social objectives to conduct a business or trade….

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Business contracts and the law

Business contracts and the law

Businesses sell goods and services between themselves and they therefore require contracts. Commercial law is often used to refer to the legal principles that govern contracts between businesses. The law of contract is a central element to the formation and construction of commercial contracts; however, a number of commercial transactions are also governed by their own set of rules, which modify general contract law, for example the Sale of Goods Act 1979. You should be…

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Heres how I made an acquisition

Heres how I made an acquisition

When Penny Harper set up her recruitment consultancy, The Recruitment Link in Newcastle-under-Lyme, expansion through acquisition came sooner than expected. In her first year of trading Penny was approached to buy another business in the area. Know the market “Although I wasn’t spending a lot of time seeking an acquisition to accelerate our growth the opportunity was interesting. I knew the national and local recruitment market well and believed that we could establish a stronger…

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The franchise agreement

The franchise agreement

When you franchise your business, you – the franchisor – enter into a legal agreement with the franchisee. A clear, written contract is essential. This franchise agreement sets out what rights and obligations you each have. Key issues include: what territory the franchisee can operate in and whether they have exclusive rights in that territory what rights the franchisee has to use your intellectual property – eg your trade marks what restrictions there are on…

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Plan your joint venture relationship

Plan your joint venture relationship

Before starting a joint venture, the parties involved need to understand what they each want from the relationship. Smaller businesses often want to access a larger partner’s resources, such as a strong distribution network, specialist employees and financial resources. The larger business might benefit from working with a more flexible, innovative partner, or simply from access to new products or intellectual property. Similarly, you might decide to build a stronger relationship with a supplier. You might benefit…

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Arranging to make National Insurance contributions

Arranging to make National Insurance contributions

As well as registering as self-employed you’ll need to arrange to pay Class 2 National Insurance contributions (NICs), unless you expect your earnings to be very low – see the later sub-section if this applies to you. For the tax year 2009-10 the Class 2 NICs rate is £2.40 a week. The most convenient way to pay Class 2 NICs is via direct debit. Paying by Direct Debit has many advantages: it’s easy to set…

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What is an invitation to treat in contract law?

What is an invitation to treat in contract law?

The concept of a contract is well known to most people, and not simply those who work in business. It is essential that a contract is legally valid if ever one party involved intends to enforce its terms. What makes a contract? In extremely simple terms, the elements that a court will look for when deciding if a contract is legally binding are an offer, acceptance, the intention to create legal relations, and consideration. An…

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Staffing issues – before and after

Staffing issues – before and after

One of the main attractions for a merger or acquisition can be increased efficiency, so you may need to make some staff cuts or changes. A merger or acquisition will often go more smoothly if the staff in your business and the target business are protected from uncertainty and involved in the process. Before the deal begins, consider how you can: keep key staff informed – bear in mind that some information may need to…

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Marketing your franchise opportunity

Marketing your franchise opportunity

You need to be realistic about how quickly you can grow. Although new franchisees usually provide the capital for their operations, you will be involved helping them set up. For example, you will have to run initial training, or provide hands-on support when they first start trading. This means that you may only be able to cope with one or two new franchisees at a time. You may also prefer new franchisees to be relatively nearby,…

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Choosing the right joint venture partner

Choosing the right joint venture partner

The ideal partner in a joint venture is one that has resources, skills and assets that complement your own. The joint venture has to work contractually, but there should also be a good fit between the cultures of the two organisations. A good starting place is to assess the suitability of that you already have a long-term relationship with. You could also think about your competitors or other professional associates. Broadly, you need to consider…

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Checklist: setting up as self-employed

Checklist: setting up as self-employed

In order to legally set yourself up as a self-employed sole trader there are several things you must do. Make sure that you: register as self-employed with HM Revenue & Customs (HMRC) obtain any permits and planning permission that you may need from your local authority contact your local authority to find out whether you need to pay business rates contact HMRC to register for VAT if you expect to have turnover of more than…

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Making a legally valid business contract

Making a legally valid business contract

If you own a business, you will have to enter into many contracts with vendors, customers and other parties. A business contract is a legally binding agreement between two parties, usually for the provision of goods and services or both. However, in order for a business contract to be legally valid and therefore enforceable in court, certain elements must be present. Can both written and oral contracts be legally valid? Contracts do not have to…

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The deal itself – a checklist

The deal itself – a checklist

After you have registered interest in doing a deal with another business you will probably follow a process that includes the following steps: appointing professional advisers – legal and financial carrying out due diligence valuing the business negotiating financing of the acquisition/merger making an initial offer subject to contract agreeing the main terms of the deal including a payment schedule, warranties and indemnities from the other business updating due diligence based on access to the…

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Managing your franchisees

Managing your franchisees

Franchising your business isn’t about selling franchises and then forgetting about them. You have a continuing relationship with your franchisees. As part of this, you must provide the support detailed in the franchise agreement. This can include: helping them with initial set up of their franchise providing training in how to run the business running national promotional campaigns to increase sales helping them manage their business effectively innovating to keep your product or service ahead of the…

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A summary of common legal structures for businesses

A summary of common legal structures for businesses

Each legal structure for businesses has advantages and disadvantages. Being a  is the simplest structure, with the fewest rules. However, it leaves the owner most exposed if something goes wrong. It is generally not suitable for raising capital. share the burden of ownership, allowing two or more people to set up in business together. Like a sole trader, a standard (unlimited) partnership does not have a legal identity separate from that of the partners, so does not…

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Registration documents and forms

Registration documents and forms

To set up as a limited company in the UK, you – or the agent acting for you – will need to send several documents and completed forms to Companies House: , giving the name of, and authentication by, each subscriber , describing how the company will be run, the rights of the shareholders, the company’s objects (unless they are unrestricted) and the powers of the company’s directors form IN01 (Application to register a company),…

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Do I have an enforceable contract?

Do I have an enforceable contract?

To answer the question whether a particular contract is enforceable, you need to begin with the basic elements of a contract. Most of the time, if a contract turns out to be unenforceable, its because one of these basic elements is missing or inadequate. This article discusses these basic elements and some enforceability issues that are currently of particular interest where commercial contracts are concerned. The Basics The basic elements of a contract are (i)…

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When a partner dies

When a partner dies

The deceased partner’s executors are  remove their capital from the business. Future profits may be split among the remaining partners unless they continue to use the deceased partner’s partnership property. The partners in the old partnership have the right to use partnership property to pay outstanding debts, and to split what remains between themselves in accordance with the partnership agreement. This does not include income tax or National Insurance contributions, as partners are responsible for…

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Legal aspects to consider

Legal aspects to consider

Different legal issues can arise at different stages of the acquisition process and require separate and sequential treatment. Due diligence stage Due diligence is the process of uncovering all liabilities associated with the purchase. It is also the process of verifying that claims made by the vendors are correct. Directors of companies are answerable to their shareholders for ensuring that this process is properly carried out. For legal purposes, make sure you: obtain proof that…

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Heres how I turned my existing business into a franchise

Heres how I turned my existing business into a franchise

For Neil and Mandy Chapman, a career break to indulge their passion for sailing, turned into a franchise business success story. Ten years after starting up as a small-scale yacht brokerage in Wales, Boatshed.com is now the world’s largest used yacht brokerage group. Here, Neil explains how franchising worked for them. What I did Build a strong business “In 1999, my wife and I took 10 months’ sabbatical to go on the sailing trip of…

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Who to notify to ease the transfer to a new legal structure

Who to notify to ease the transfer to a new legal structure

If you notify the right people at the right time of any change in the legal structure of your business, the changeover from one entity to the other should be relatively easy. Customers Depending on your contracts with your customers, you may need their consent to transfer contracts to the new business entity. If you don’t get their consent, and the contract requires it, this may constitute a breach of contract or give rise to certain rights,…

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The companys officers

The companys officers

The officers of the company are the people formally appointed to run it – the company directors and company secretary. By law, companies must have officers in place at all times, and their names and addresses must be on the company’s registration documents. If officers resign or new ones are appointed, or if their personal details change, the Registrar of Companies must be informed straight away. You can find downloadable company registration forms on the Companies…

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Breach of contract and lawsuits

Breach of contract and lawsuits

Although most people try to avoid lawsuits and prefer not to breach contracts, there are times when people find it necessary to take a contract dispute to court. This article provides a basic overview of the law and remedies for breach of contract. Breach of Contract Where two or more parties have entered into a legally binding contract, a breach occurs where a party fails in some way to carry out his contractual obligation. For…

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When a partner becomes bankrupt

When a partner becomes bankrupt

If a partner is subject to a bankruptcy order, they will have to hand over control of their assets to the official receiver. This will probably mean that the official receiver – or an insolvency practitioner if one is later appointed – will dispose of the partner’s share of partnership property and use the money to pay the fees, costs and expenses of the bankruptcy and then the partner’s creditors. The partners in the old…

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