April 7, 2019

Do I need to register a company from the start?

I have started working on my idea recently, hopefully it will be ready for initial lunch in a month or two.

It will target rather niche community so I don't expect to make big buck from it. To be honest my primary motivation is to get something out there, and up my skills. As about monetary profits, I will be happy if it at the very least covers the cost but it will most likely be some time into the future when I get first income.

One little detail that I'm unclear about is, do I need to register a company? Can I just run it on my personal account in Google Cloud(Firebase) and once the idea proves to be valid do the paperwork then?

I'm in UK if that matters.

#ask-ih

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    Are you going to sell your product to consumers or businesses? If it's B2B then companies buying from you may want to get an invoice, and then you would have to register a company to issue a valid invoice. At least that's how it works in Poland.

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      This comment was deleted 6 months ago.

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    You don't have to start a company.

    You should keep a log of costs to reclaim them for if/when you do.

    You should probably start a company when money starts coming in, but you don't have to as you can do it on a self employed basis. You will need to keep a log of all income and costs as you will still be expected to report this - either as a company or on a self employed basis.

  3. 1

    From the U.S. here.

    I'd suggest, like some others here did, that when you start making money then consider setting up a company. I have a sole-member LLC that I created but it was after several attempts at different projects before I established it. Just don't let not being incorporated become an obstacle for you, in the beginning it's not that important, especially if you're bootstrapping.

  4. 1

    My advice is not to open a company until you validate your business idea/model.

    In the meantime, you can:

    a) Offer your product/service for free, but let people know that it's just a temporary free demo and you might charge for it later on.

    b) Accept payments on your personal PayPal or some other money transfer service (but be aware PayPal might ban you for this).

    c) Accept payments in crypto (this way you can validate if people would pay for it). The problem might be that you could turn off people who are not familiar with crypto.

    d) If you really need to issue an invoice, ask a friend who has a company (or some other legal form) to temporarily issue invoices on your behalf until you validate your business idea.

    Options b and c are in a bit of a gray area, but for the initial validation would do.

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      This comment was deleted 6 months ago.

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    I know you are in the UK but in the US we have Sole Proprietor (SP) which simply means a business of one. No employees, no partners, just you. With an SP, you can get a Employer Identification Number (EIN) which is your business' ID. With the EIN you can open bank accounts and other business-related things that require a "Company" to do. All income is added to whatever taxes you report for your personal income.

    All of this is US related but maybe the UK has something similar?

    Good luck!

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      This comment was deleted 6 months ago.

      1. 1

        Thanks for the knowledge-share!

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    This comment was deleted 6 months ago.