Starting a business with a friend?

[PapaLazaru]

I lost a very good friend after going into business with them. I had a nagging doubt before we did and after a few months everything just broke down as I was very much of the 'lets get money rolling in first' and he was mucking about trying to get a good logo and website sorted.

I pulled out having spent a lot of time and money but that was secondary to losing someone I liked and trusted for years.

That was about 7 years ago and it still makes me sad typing this.

Hope yours goes well.

 

[sanaxe1]

The best thing to do is to keep it all very laid back and vague. Have a joint account you can both easily access , just take money from the business here and there when you need it and make sure you don't sign any contracts as no contract is going to trump the trust between to friends.

 

[Russinating]

Just to give the another side to it, I've been in business with my best friend for 10 years, first as sole traders and then as a limited company (last 7 years). No problems whatsoever.

 

[Mr Jack]

I've worked for multiple companies set up by friends. There's no reason it can't work. Yes, it can be bad, but there's no reason it has to be.

 

[Deleted member 11679]

I run a small part time photography business with a good friend of mine. We only use it to earn holiday money and have a turnover of about £6-9k. In answer to your questions.

1. Do we open a normal joint bank account?

No.

2. Do we open a business bank account?

Yes. Also, look around for deals as you can get one fee free for about 18 months.

3. Do we need to set up a limited company?

Depends on your situation. As teachers we felt this was best as the business involves working with schools and it allowed us to keep the business totally separate from our day-to-day. We also aren't liable for the companies debts and this was important as we both have mortgages.

 

[flibbage0]

Thanks for the replies, just to clarify we're only putting in £150, so if we make a loss it won't matter too much.

I've heard that you can get a partnership done instead of a limited company, how does this work?

 

[Deleted member 11679]

This should have everything you need:

https://www.gov.uk/government/publi...ister-a-partnership-for-self-assessment-sa400

 

[flibbage0]

This should have everything you need:

https://www.gov.uk/government/publi...ister-a-partnership-for-self-assessment-sa400

So once a partnership is created, do we need to involve a chartered accountant to do the yearly accounts like we would with a limited company?

 

[flibbage0]

Was thinking what about sole trader, With one of us being the main trader and then paying the other persons share.

Is that legally possible?

 

[Mr Jack]

So once a partnership is created, do we need to involve a chartered accountant to do the yearly accounts like we would with a limited company?

Unless you're making peanuts, an accountant is usually worth their cost. Mine used to save me more than twice what I paid her even before you consider the savings in terms of time and energy.