You would have to sign a deed of partnership which is a legal agreement signed up between the partners.
Other possible routes of business are private and public limited companies.
Private limited Companies
This is a Ltd. (Limited) company, it’s advantages are Shares which are means of raising capital, it’s legal identity it can take legal action against other companies, it is a business which can be sold by shares so those people who buy shares own a part of the company.
Also you can have a director’s running the business and this type of company is easy to borrow money from the bank.
The disadvantages are that you have to display financial information about the company to your competitors, you cannot offer shares in public, a lack of capital also can affect you as the shareholders can’t fund the business all the time and you can’t sell shares in public and finally dividends would have to paid to the shareholders which can drain your company’s assets.
Sole Traders, this is a business where you work on your own, it is a very cheap way of setting up a business meaning you don’t need much money. You would be in full control, no financial information would have to be released and you would keep all the business profits. However there are bad things, unlimited liability, this is when you lose your own possession’s if you cannot pay the debt, a lack of money, no one could take over if you were to go suddenly go ill. You could have to work long hours. A shortage of qualified workers and also it might be hard to go big time with the money, as there will be lots of competitors.
Public Limited Companies
The advantages of public limited companies are that you can sell shares freely on the stock exchange for people to buy, to be a public limited company you must issue share capital in excess of £50 000. Your shares can change value for the best or the worst. Other advantages are that you can borrow money easily to finance your expansion, also you can raise large sums of money by selling shares.
The disadvantages are that it is very expensive to set up and also complicated, financial information is available for the whole public to see, the public expect a dividend profit at the end of the year and finally it is easy to be taken over by other companies if they buy enough shares on the stock exchange.
Franchises
A franchise is where you take the name and logo of an already set up company and work under their wing. The company would provide the services and products but there are advantages and disadvantages.
The advantages are you would have no competition from other companies, it would be a tried a tested idea, the advertising nation or worldwide is taken care for you, you would get training and advice on running the business and there would be a reduced risk of failure.
There are disadvantages though all supplies must be purchased at the price they determine, you would need a lot of money to start of with, you may be required to pay money towards the head of the company, you may not have total control of the business which you operate, you might not make enough money to cover the costs and all losses would have to be paid by the franchise.
In Conclusion I feel that the option is that you should become a sole trader, it is an easy way starting your career as a Computer repair consultant, in time I recommend joining as a partnership and increasing your income.
Also hopefully you will become a Public limited company so you can become a well respected person within the stock exchange.
Yours Sincerely
Chris Pearson
