Results 26 to 36 of 36
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07-09-2009, 06:54 AM #26Newbie
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if he is legally too young just transfer it to his parents.
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07-09-2009, 08:26 AM #27Newbie
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Tansferring it to his parents wouldn't be possible though. Not only the fact they'd have to start filing tax papers for it but also its not registered from what I can tell on here and what i'v seen.
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07-09-2009, 08:53 AM #28Newbie
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yeah i second the part where you should see an attorney in your respective area to check the legality of the business
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07-09-2009, 09:30 AM #29Newbie
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Ok well thanks everyone that has posted and helped towards answering my question. I think i'll wait till im older to do business that involves monthly payments and just stick to banner creation and button making.
Not my favourite but best at the moment. Thanks all.
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07-09-2009, 12:50 PM #30Web Hosting Master
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- Oct 2005
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- UK
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Just a quick note, accepting "monthly payments" isn't any different to "accepting payments" - the term of the payment doesn't mean you don't have to trade legally.
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07-09-2009, 10:37 PM #31Web Hosting Master
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I would say.. is whether operating the business is legal in local regulations. qns like.. is it locally registered? is it legit?
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07-10-2009, 01:18 AM #32Web Hosting Master
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Wow, there's a lot of misinformation in this thread. I'm agreeing with Dark Light in that a lot of the posters here are from the US where laws differ considerably (we can drink from an early age for example), especially in terms of contract law. The US system is based off ours, but is not the same.
Before 2006, there was no minimum age limit for a director in a British Private Limited, Public Limited or Limited Liability Partnership (all companies registered through Companies House). The minimum age is now 16, which is enforced by Section 157 of the Companies Act 2006. This came into force October 1st 2008. Since he has not registered with Companies House, he is legally trading a Sole Trader, which is completely legal for a 16 year old.
As for the tax, he does not have to be VAT registered with Her Majesty's Revenue and Customs (HMRC, the new name for the Inland Revenue). There is a minimum threshold, which once reached, registration is mandatory, however, in the meantime, it is optional. He will pay VAT on all services and products he buys, if he isn't registered, he can't claim this back. He can also not charge VAT. Since he is over 16, he will have to pay income tax if over the minimum limit (although I don't know what this is, it's best to contact an accountant or HMRC directly).
As for the contracts, it would have to be determined by a court of law whether they were in their capacity to agree to the contract. There is no hard age limit in the UK, as opposed to the US. For example, if a 5 year old agreed to hand over all his money for the rest of his life and signed a piece of paper to that effect, a court would determine that it was not in his capacity to do so and the contract would be void. On the other hand, if a 16 year old agreed to provide a service which was well within their powers to do and to set out basic agreements, they should be considered within their capacity to do so, thus making that specific contract valid. Note I said specific, it would vary by contract but a court might well determine that it was in his capacity to agree to any contract, unless of course the contract is illegal itself.
The best thing to do is to talk to a solicitor and an accountant. They will know what is legal and what is not, but as far as I can see, what he's doing is legal. Including the contracts he signed.
Sources:
Companies House, HMRC, The Tax Shop (an accountancy firm we use), numerous registered solicitors.Last edited by FS - Mike; 07-10-2009 at 01:32 AM.
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07-10-2009, 07:17 AM #33New Member
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It isn't illegal, but the kid will still need to register the company like anyone else would and pay tax. You can bank cards in the UK when you're 16 so in theory you can set up a company with them.
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07-10-2009, 07:28 AM #34Standard Nerd
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This seems to be a very confusing area for most people. I myself am quite interesting in knowing the answer now, because I believed you needed to be 18 to be a director, but according to others it's only 16.
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07-10-2009, 07:37 AM #35Web Hosting Master
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Very well put.
davidrun; Just because you can get a bank card at 16, doesn't mean you can do everything else. You can also be a Sole Trader without registering for VAT or incorporating depending on the circumstances.
NXH-Mark; It's 16 in England and Wales, though Scotland and NI may differ. If you want a good answer, read FS - Mike's posts and then consult with your own legal counsel.
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07-10-2009, 12:24 PM #36Brian King of LLAMEDOS
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WTF, you set up a [ltd.] company with Companies House, NOT with a Bank !
You set up 'your business' youself, even if you pay someone else to do it, it's done as 'you'.
all banks do is provide services to individuals, sole traders, partnerships, charities, clubs & other organisations. [not going to mention scr*wing the same]._____________________________________________________________
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