Record Keeping & Compliance
It is important to establish an effective system for record keeping and the filing of key documentation from the very beginning. Good practices in relation to maintaining records will pay dividends in the event of a potential investment.
An investor will carry out due diligence on your business, for example, to review shareholding, ownership of assets and key contracts, so having this information in good order and readily available will present a positive impression to potential investors. It will also reduce the amount of time required to manage an investment, which could distract from the development of the business.
It is important to record accurately any investment of your own private funds into your business, which will impact issues such as tax and the ability to withdraw funds.
Set up a Business Bank Account for your business once it starts trading, keeping a clear distinction between your personal finances and the finances of the business. This will help facilitate payments and allow you to keep track of profits and losses. It will also assist in the preparation of accounts and financial reporting.
There are HMRC requirements for businesses, whether operating as a sole trader, partnership or company. Specialist tax advice should be sought to ensure that the business is compliant.