Business Accounter

Saturday, January 17, 2009

The Many Benefits of Company Formation

For many successful small businesses there will come the inevitable point where the question has to be asked, should the small business become a registered company?Company formation is something that lots of people strive for as it indicates a sign of success and demands some respect in many areas of the business world.

There are many aspects to consider when making the decision to go down the route of company formation and although it is not the right move for everyone for many it can be the platform to greater things.Company formation depends on several factors not least of all the company's annual earnings.

The process of registering as a company is straightforward but can seem longwinded as there are several documents that need to be completed and depending on whether you chose to register as a private or a public company.The company formation process for both is simple but with subtle differences that can often be confusing.

The process involves, among other things, choosing a company name, selecting an area to trade from and a business type, registering any company directors and specifying what type of shares in the company are offered.

It is worth considering taking advice on company formation from specialists.There are lots of companies that now offer to take care of the whole process for you, for a fee.If you are unsure about the process or do not feel confident to handle the whole process alone it may be that getting help will ensure that no mistakes are made which can slow the process down and even incur financial repercussions.

Once registered you are obliged to adhere to certain rules and guidelines, the company name must be clearly displayed outside any business premises and the company name and registration details must be visible on all company correspondence; letters, invoices etc.Specialists in company formation will be able to advise on all these matters and many more.

There are four types of company:


1.

Private company limited by shares - A private limited company has a share capital.Shares cannot be offered for sale to the general public.The liability of its member is related to the amount unpaid on shares that each member holds.

2.Private company limited by guarantee - Members do not purchase shares but agree to contribute to the company's assets if the company is ever wound up.

3.Private unlimited company - This type of company can have shares but doesn't have to.There is no limit to members' liability and this type of company does not have to offer up as much information as other types.

4.Public limited companies are identified by several factors.A public limited company has a share.Shares may be offered for sale to the general public and can also be quoted on the stock exchange.The liability of its member is related to the amount unpaid on shares that each member holds.

In an increasingly litigious world many small and medium sized businesses are seeing the insurance benefits of company formation.Registering as a company legally separates the obligation of the individual and the business and recognizes the fact in law.This is useful for unseen circumstances including accidents to employees.

As well as the benefits of liability there are tax benefits.Often the rate of tax can be brought down considerably after the process of company formation.Raising money for a registered company is easier as it involves selling shares.It is also easier to value a registered company as it does not involve an individual's assets and so is easier to measure.


About the Author

Dominic Donaldson is an expert in the company formation industry.


Find out more about company formation and how it could benefit you.

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Thursday, January 15, 2009

How Document Destruction Can Help Against Identity Theft

It seems that every time you pick up a newspaper these days there's a scare story about identity theft.If someone isn't trying to hack into your online bank account from the other side of the world or clone your credit card whenever you use a hole in the wall then there's always some bright spark around to leave a laptop in the back of a taxi that contains yours, and millions of other people's, personal details.It's no wonder then that people are considering personal document destruction as a way to safeguard their identity and cut down the risk of them being the victim of the new type of crime.

The market that has grown around this worrying trend is now very profitable with companies offering services as wide ranging as computer hard drive back up, encrypting data and document destruction.It could be called paranoia but to many it is just a worthwhile and intelligent response to a very real threat.With examples of this new type of cyber crime on the increase it looks like the industry aiming to counteract and stop it is also likely to grow.

For an individual the threat of identity theft, or ghosting as it has become known, is very real.It's not just the elderly or vulnerable who are targeted, increasingly the stories we hear are of supposedly tech-savvy people being duped.People who think they'd spot a scam a mile off are now just as at risk as any other group.There are now several products on the market which can help to give a person piece of mind when they are using credit cards, computers or dealing with paperwork.

Data protection doesn't just relate to big business.We all have important personal data stored on our computer even if we're not aware of it.Computers store web pages we have visited, the pages it stores can contain personal data like addresses, telephone numbers, passwords and numerous other things that a cyber criminal might be able to use.Thankfully there are now some very good software packages that can help protect this data.Some is aimed at the single user home computers; some is aimed at larger companies.It all serves the same purpose which is to protect your data.

Used in conjunction with some simple measure that you can carry out yourself, installing software to protect your data when online, can be very effective.The advice is to have different passwords for different sites and different purposes.The thought being that if everything is the same then everything is at risk; think of it as damage limitation.It is also recommended you never give out your personal details online; in chat-rooms or social networking sites.No matter how trivial it may seem you'd be surprised how easy it is to be fooled into giving criminals enough information for you to be at risk.

Once you've taken precautions to protect yourself 'virtually' it's time to protect your printed documents.Document destruction has become popular on the back of lots of well publicized cases where people's identities have been stolen by people getting hold of old bills, bank statements and letters from bins.It's no longer enough to discard your old paperwork, you must now dispose of it in way that means it cannot be used to learn anything about you.On the back of this shredding and paper shredders have become a familiar sight in homes and offices around the world.

Shredders are now relatively inexpensive and provide piece of mind when it comes to identity theft.Many companies also offer a large scale document destruction services to big businesses whose employees are not only prone to identity theft but are prone to attack on a much larger scale; corporate crime on a large scale is now a very real threat.


About the Author

Dominic Donaldson is an expert in the security industry.


Find out more about document destruction and online security.

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Sunday, January 11, 2009

How To Pitch To Investors

Companies preparing to meet with investors can improve their odds of raising capital by creating a compelling story and pitching that story to investors.The goal of the pitch is not what you might think.The goal is to peak the investor's interest to learn more.

Focus on the most important points on your business model for the time you have such as the problem, the solution, market size, customers, sales cycle, barriers to entry, IP protection, competition, partners, joint ventures, management, advisory board, financials, uses of funds, and the offer.Take your time to make sure you are clear and understandable to the investors.

Entrepreneurs messaging should articulate their unique value proposition about their target market on how the investor will get a "pay raise" by choosing to invest.The message should be tailored to the investment audience.

-Investors that are in the "business of investing" look for reasons not to invest so they can narrow down the deals they will examine if the company has:


-Incomplete financials and/or business plan


-Complex or confusing message on business model or investment opportunity


-Structure of the offering, relative to a high valuation, unclear exit or return to the investor


-Inexperience or incomplete management team and/or attitude of the management


-A specific industry focus or niche marketplace


Companies often have third parties review their business model documents like the business plan, financials, and offering to:


Identify and examine your market opportunity, your company's role in that market, your competitive and market analysis


- Evaluate your proof of concept and validation of your product or service


- Verify your business has clear business objectives and milestones for financial, sales, customer database, internal organization, and employees


- Identify your business strategies for growth, infrastructure, and development for financial accounting and human resources


- Check for any fatal flaws in your plan that would keep an investor from investing


- Appraise that your concepts are in clear and concise terms that an investor will understand


- Determine if your revenue and financial model makes sense for your business model


- Assess your plan from the investor's point of view, the ability to attract capital at the best value, and meet the expectations of professional investors and lenders.

Companies need a reality check when raising capital.It costs time and money to raise money.

Entrepreneurs must plan accordingly.You can spend a lot of time identifying, scheduling, meeting with each investor and following up and following through.This involves potentially hundreds of meetings and getting a lot of .It is very difficult to raise a lot of money, in a timely manner, and run and manage a fast growing early stage company.

Often entrepreneurs hire an investment banking firm, broker dealer, or professional services firm in that business to help them manage the investment raise process, which costs money.The seed round should be done on your own; with investors you know or have direct access to, without paying any fees.

Once you are beyond their seed round, you need to adopt strategies that will put you in front of hundreds of investors over a reasonable amount of time.This includes participating in business plan competitions, investor forums, and as many opportunities as possible to "pitch" to investors.

There are fees associated with putting these events on and therefore a cost should be anticipated and budgeted for in raising millions of dollars.Entrepreneurs should only pay to present to a group of investors after they have raised a seed round and need access to a new larger pool of potential investors that are savvy about high growth opportunities.

Whether you are seeking $100,000 or $1,000,000, a structured offering should be based on solid inputs from the business model to establish the value of the stock and how much investors will get for their investment.

Documents must be signed and entrepreneurs must establish a legal protocol for collecting the money.That protocol can include a Private Placement Memorandum (PPM), Subscription or Stockholder agreements.These documents explain the opportunity, the risks, and have an investor questionnaire to validate the investor has enough wealth to make the investment.


About the Author

"Where Qualified Investors and Capital Connect with Innovative Companies".

Network of Business Angels Investors (http://nbai.net), and NBAI Private Equity Investor Forums."How to Pitch to Investors" free webinars at http://findinvestorcapital.com and more info at www.launchfn.com


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