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Brucie

UK Ecommerce Site?

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If you are based in the UK like myself, you really should be abiding by a number of laws and making sure that your shop complies with them.

 

This website that I found was invaluable (http://www.out-law.com/page-351) with regards to ecommerce in the UK with helpful tips such as protecting against pricing errors. I've noticed a lot of shops running OSC here in the UK not having even half the required points (such as Active and Inactive Terms and Conditions, read it and you'll understand!) that you are required to have to operate as a e-trader.

 

I followed the advice pretty much to the word and think I'm covered against the major tripping up points but I'm no lawyer, although if anyone has any questions just ask them and I'll try to help.

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I think they're being excessive, and it depends largely on the type of business. For me, life is made much easier by my business being a partnership rather than an LLC.

 

Your legal requirements as a business are summed up nicely on this government run website:

 

http://www.businesslink.gov.uk/

 

 

I would swear by that website.

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Are partnerships in the UK run much differently than here in the US? I would never, ever, enter into a partnership -- you have absolutely no protection against malfeasance by a partner, you have no protection of your personal assets, and even honest disagreements in running the business can make things grind to a halt. Far better to form an S-Corp or an LLC, or even a closely-held C-Corp. By the way, is an LLC (Limited Liability Company) exactly the same kind of creature in the UK as it is in the US? How about LLPs (Limited Liability Partnerships)?

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An LLC in the UK is called an Ltd (Private limited company).

 

You need a certain number of officers (minimum of 2) to have an Ltd company; but this protects the losses should the company go into receivership.

The other types of companies are PLC (public limited), sole trader (one-man band without limitation on losses) and partnership.

 

A partnership has equal liability - but can have a type of pre-nup agreement to explain who would cover what or, more usually, identify who brought what to the table when the company was started.

They would then get this bit back before the the company is split, or would not be liable for as much if it failed.

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...You need a certain number of officers (minimum of 2)...

The new company act only requires one person, ie, the director, to create a limited company. a secretary, who could not be the diretor, is no longer required.

 

Ken

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The new company act only requires one person, ie, the director, to create a limited company. a secretary, who could not be the diretor, is no longer required.

 

Ken

That's a new one on me. Thanks.

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against malfeasance by a partner, you have no protection of your personal assets, and even honest disagreements in running the business can make things grind to a halt

I disagree. I think you'll find you can very easily draw up legal agreements that help to protect you against the sort of thing you describe. I have one of these with my business partner, and everything is running smoothly. There are no disagreements, we simply stick to what we signed to (which we have to, legally, without the signatures of both partners agreeing otherwise).

 

As for personal assets, I'll be quite frank. If you can't survive with your own funding and with liability for your finances, you shouldn't be running a business.

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A caveat: running a business, and various forms of business organization, may be much different on your side of the Pond than it is over here. When you and I say "partnership", we may be talking about totally different critters, for all I know.

 

There are no disagreements, we simply stick to what we signed to (which we have to, legally, without the signatures of both partners agreeing otherwise).

 

You've been very, very lucky to have a highly compatible partner. I've seen lots of partnerships come apart due to disagreements over the course of the business, not to mention outright incompetence or bad business behavior by a partner. A question: what happens when something not covered by the agreement comes up, and the two of you disagree? If it's a 50:50 partnership, you're stuck, unable to come to a decision. Or do you do "rock, scissors, paper" best 2 out of 3, to determine who gets to make the decision this time?

 

As for personal assets, I'll be quite frank. If you can't survive with your own funding and with liability for your finances, you shouldn't be running a business.

 

At least in the US, a partnership exposes each partner to some percentage of any claim against the business. If you get sued beyond what your insurance and business assets will cover, you can lose your home and savings. There's no layer of protection as you get in corporations (although the veil can be pierced for demonstrated wrongdoing).

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Then don't get sued... it does vary according to the purpose of the business, but as long as you research carefully what you're doing (which you should be doing anyway, or the product/service your offering probably isn't as good as it could be) there's no reason why you should be sued for anything.

 

 

An answer:

 

In the case of disagreements, there are clauses in the deed stating which partner has authority given different specific circumstances. As we each specialise in certain areas of business, and these broad areas are listed under each partners name, that's (in most cases) the partner that makes the decision.

 

For anything else, we have very broad clauses that cover any situation that could arise. Especially important are clauses insisting on written consent for anything not covered in the agreement.. and it describes what happens if written consent was not given. So that's what happens when a disagreement comes up not covered in our legal document.

 

But its a long deed of partnership... and for us at least I can confidently say there won't be anything not covered by it.

 

 

 

 

There are many benefits of running a partnership that most people overlook:

 

It's very quick and easy to set up - get on with the business and stop wasting time filling in paperwork

There are no additional taxes/fees - start up business that aren't 100% confident may not like paying out corporation taxes and registration fees

Because of the possible risks associated with unlimited businesses, partnerships tend to have very effective administrative and financial systems and records, but (unlike limited businesses) don't have to spend hours of time, or hundreds of pounds, getting highly detailed financial accounts published.

 

In short: it's easy as pie.

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Then don't get sued... it does vary according to the purpose of the business, but as long as you research carefully what you're doing (which you should be doing anyway, or the product/service your offering probably isn't as good as it could be) there's no reason why you should be sued for anything.

I had to ruefully chuckle when I read this. You wouldn't last 5 minutes in the US. People can, and do, sue over absolutely anything. You run a dry cleaner's shop and lose someone's trousers? $50 million please. You manufacturer kitchen refrigerators and someone destroys their back running a race carrying one? $15 million, please. The list is endless. We're an absolutely insane society that is quickly destroying itself.

 

Shakespeare had it right: "First, kill all the lawyers."

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I had to ruefully chuckle when I read this. You wouldn't last 5 minutes in the US. People can, and do, sue over absolutely anything. You run a dry cleaner's shop and lose someone's trousers? $50 million please. You manufacturer kitchen refrigerators and someone destroys their back running a race carrying one? $15 million, please. The list is endless. We're an absolutely insane society that is quickly destroying itself.

 

Shakespeare had it right: "First, kill all the lawyers."

 

Then I'm glad I'm not in the US.

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Thankfully the UK is not the litigious society that the USA is. Setting up a Limited Company may seem like a good idea but it brings with it many drawbacks and is not recommended for start-up companies.

 

Sole Trader is fine for most, but then there's a Partnership, and even a Limited Partnership (where only one designated Partner is fully liable).

 

Vger

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