Partnership

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Mstango

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Joined
Jul 22, 2018
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Location
Glasgow
Thinking of going into a partnership with a hairdresser while I do holistic treatments (I am HND qualified in beauty therapy but have been out of the industry for a bit, have re-entered by working in Spa’s rather than a salon) he suggested setting up as a limited company as then we aren’t tied in financially to the business. Does anyone know more about business structures and what would be the best steps to take to get us up and running.

I am fully stocked and equipped. Hairdresser in the other hand would need colours, chairs, mirrors etc. We would need salon furniture like reception desk, sofa for waiting area, nail bar perhaps. Insurances and any legal/council licenses etc,

Not sure how much we would need for the initial outlay too. As this would need to be halved.

Any advice would be much appreciated. TIA
 
We're not business experts so your best bet would be to speak to a solicitor specialising in business in the first instance. I would imagine the cost of an hour with an expert would be well worth the cost in potential savings should anything go wrong.
 
As above, professional advice would be extremely beneficial and worth every penny.
What I would say is make sure you see the value in a partnership vs going alone. What are the benefits as initially I can't see any apart from shared rent?
 
I’d also say if you can afford alone it’s going to be better, so many potential risks you are closer to a business partner than a husband/wife so it’s painful if things go wrong.
 
Don't do it. Don't set up a limited company for you to trade together out of the same bank account. There's nothing wrong with having a limited company, just don't set one up for the two of you to run together. Agree a business name and market yourselves together, have a shared social media platform and work together co-operatively. Keep the money separate.

The reason is that if you trade together as one business, the two of you will end up having to charge VAT which will add 20% to your costs, add hugely to your administration time and overhead and probably make your prices uncompetitive.

Go to an accountant for business advice, not a solicitor. You might not want to set up as a limited company straight away. You'd be wise to have a formal agreement about sharing rent, bills etc and a solicitor will help you with this.

Good luck.
 
I do the accounting for my husbands business he’s vat reg and it’s enough to make me want to shoot myself doing vat.
 
Thanks everyone your knowledge and advice is much appreciated. We are going to need to discuss things in more detail. Get things drawn up too.
 

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