Making The Move To A Formal Company Structure – What Happens Next?

If you’re a freelancer or self-employed, you might already have been turned away from working with some big companies. Many big businesses will only work with formally registered companies. Sometimes it’s an insurance obligation. Other times it’s a due diligence approach to credit checking you. There are many reasons, but it makes it tough for you to break into the bigger leagues of clients.

 

Registering and forming your company takes next to no time and costs almost nothing. But it is a big commitment, and lots of things about how you work will have to change. As with anything, there are benefits and disadvantages. If you choose to proceed, here are the next steps you need to take.

 

 

Let Your Suppliers Know

The people that provide your supplies will need to know who to bill if you have a credit account with them. In some cases, you might not be able to continue on the same terms so be prepared for this to happen. Of course, it might now make you eligible to start using credit once you’re a formed company. The best thing to do is let each supplier know of your change of status and let them decide how they wish to proceed.

 

A formal company means you are reducing your personal risk of liability. A limited liability might make some suppliers more cautious about working with you. If you cease trading, go into administration or lose your status, suppliers might never get paid.

 

Change Your Letterhead

Now your formally a company, it’s essential you update your company letterhead. Then there are the business cards, the website, the sign on the building – the list goes on. This can work out to be rather expensive, so it might be best to order stationery a little at a time.

 

Prepare Your Taxes

You might have to change the way you run your books now you’re a company. Some self-employed people don’t return much beyond their bottom-line figures. As a formally structured company, you have obligations and different contributions to make. You might be required to engage a professional accountant too. When you’re ready to find a professional service like that, it’s worth considering the array of other services they might be able to provide a business like yours. You can view websites like bswllc.com for more information about financial help you can get from an accountant.

 

 

Let Your Customers Know

You also have to let each of your customers know that things are changing. Make sure you clarify the dates these changes occur. Detail what the customer needs to do if anything. Add a couple of methods to get in touch with you to ask questions as well. When you reach out to customers, it is always important to provide lots of ways they are benefitting from whatever it is you are talking about. In this case, a formally recognised business assures them they are doing business with a professional group of people.

 

Change Your Charges

You might discover you have additional expenses and overheads now you are a formal business. It’s important you find a way to manage with those new costs. This might include changing your charges for new and existing customers. To do this, you must give notice and the opportunity for them to get out of the contract with you at no cost to them.

 

Know Your Legal Obligations

Of course, there are far more legal obligations to consider now. Tax returns aren’t the only change. As a registered company, you are now far more visible than as a sole trader. Others can see your trading history and even your returns in some cases. They can see your home address, full name and date of birth too. Be wary that all the information you disclosed to form your company could be in the public domain. If they change you must register the changes through a formal notification.

 

Get To Know The Other Key People Involved

You can’t form a company alone. This is because you can’t have a business meeting alone. You need at least one other person involved. They don’t have to receive a salary or a fee from you. They will have obligations to the company as well. As a business owner, you will retain the shares in your company unless you choose to divide them or sell them. It’s worth building a relationship of trust and cooperation with your other Director or Secretary. They must be contactable at the very least.

 

 

Your Future

As a company, you will be expected to take a salary. This is usually a fixed figure. If the company can’t pay you that wage, you go under. Some of your business income is also expected to be invested to help the business grow. The rest of it is placed in an official business bank account as a reserve during quiet months. You might consider it an operating fund. Speak to your accountant about each of the financial commitments.

 

Your personal finances are now separate from your company. However, as a sole trader, the line here might have been blurred. You might have stocks, a pension fund, and even a savings account in your own name. None of that can be affected by the business. Regardless how they were funded in the past, they are separate now.

 

If you’re drawing a wage, you might also be drawing a pension and maybe even some benefits. Set these figures realistically, so the company doesn’t struggle. You must prepare a plan to help you focus on growth and driving more customers in. Sales are everything, but your company is new. To build trust and credibility, explore different marketing platforms. You are still the face of your company. Start talking about your industry and your expertise as an entrepreneur. You’re an influencer, so start reaching out to share those insights. Are you ready to form a company and develop it into a successful business?

Vote For Me @ The Top Mommy Blogs Directory Vote For Me @ The Top Mommy Blogs Directory