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Should Spice (UK) Ltd Become a Public Ltd Company?

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Introduction

Business Studies: Course Work Should Spice (UK) Ltd Become a Public Ltd Company? 1. Introduction Spice (Special Programme of Initiative Challenge and Excitement) is a franchise operation with tens franchises island-wide. The franchise offers activities and adventures to it members, who approximately number over twelve thousand. The company generates revenues from an annual subscription fee from the members of their spice branch (Manchester) as well as from a percentage of the profit (royalty) from its nine franchisees. This is a lucrative business making high profit and is much sustainable. It was founded as a sole ownership by Mr. Dave Smith twenty-two years ago in Manchester. With initial success, it was developed into a partnership. As a result of continuous success its operations expanded into a Franchise operation with a Private Limited ownership. Currently, the company has envisaged there is a room for further expansion but it is impossible to it in its current state. The main issue confronted by Spice Ltd is whether it should diversify their business operations by exploring into a number of related business areas or change the ownership structure into a public limited company. ...read more.

Middle

No Double Taxation. Because the business is not treated as a separate taxable entity, all business income is reported on the owner's individual tax return and is therefore only taxed once. Finally, if you have a business loss, you may be able to use it to offset income that you receive from other sources. Tax-free Savings. Available tax sheltered retirement programs, such as Keogh plans, can allow a sole proprietor to salt away a substantial amount of income free of current taxes. You can't really do any better by setting up a corporation. Disadvantages Of Sole (And Co-) Proprietorships These include: Liability. The owner is personally liable for any obligations of the business. This means creditors and lawsuit claimants can sue your personally, going after not just your business assets, but your other personal property as well. Likewise, personal creditors can also go after your business assets. Limited Ownership. A sole proprietorship by definition is limited to one person or a married couple. If the owner wants to admit another owner, the sole proprietorship would have to end and a new business arrangement, such as a partnership, would have to be created. ...read more.

Conclusion

If you are doing business under a trade name rather than your own, publish then file your DBA or fictitious name certificate with the appropriate local or state public office. If required by state and local laws, obtain a business license, which allows you to conduct business. You may also need a business sales tax license and relevant permit(s), so investigate this at the same time. If you will have employees, obtain an Employer Identification Number (EIN) from the IRS. That's it. As mentioned in the beginning, you and your business are now joined at the hip, legally one and the same. From now on you must report all business income and losses directly on your federal tax return, and assume responsibility for all business debts and obligations. You are the sole proprietor and can operate your business as such indefinitely. Just remember that if you want to bring in another owner or start paying your spouse, you will need to adjust the structure. 3. Became a Partnership 4. Became a Private Ltd Company 5. As a Franchise Operation 6. Towards a Public Ltd Company 7. Evaluation ...read more.

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