UK law

[RPGnet Columns]

Post originally by Tim Gray at 2002-09-06 10:25:16
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A couple of general points about the situation in the UK. I'm not an expert in any of this, and others may have more detail to contribute.

Forming a limited company - I don't think the limited by guarantee model would apply (it's used for non-profits, don't know whether you can use it for commercial stuff), so you're looking at limited by shares. AFAIK you need at least 2 people to be shareholders. (NB these are private limited companies, ie not listed on the Stock Exchange.) The case for doing this is probably less strong than in the US, eg it does involve you in significant amounts of extra admin. The key would be to look at your potential liabilities and see whether you could bear them. If you're going to have premises or employ staff, that's a good reason to get the extra cover. If you're just going to crank out pdfs on your own, it's less so.

One benefit is that the UK is still a less litigous society than the States. An interesting future topic might be legal action across national boundaries - what happens if someone in the US decides to sue you for giving them an eye problem with your cover art?

Business bank account - if you're only doing simple stuff and don't need a trading/business name on cheques, you can always use a no. 2 personal account for free. If you want an actual business account, shop around - I have free banking with Unity Trust for a social enterprise business, and there may be providers which will do it for a wider range of business types.

[RPGnet Columns]

Post originally by Sandy Antunes at 2002-09-08 12:43:13
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Hi,

Neat points. The UK in general is a lot more 'unified' than the US, it seems. In the US, incorporation varies by state, so there are 50 different sets of incorporation laws. Each state has its own paperwork, fees, rules on shares and ownership, state taxes, etc.

Add in that you can easily incorporate in a state where you don't live, and you find a lot of corporations forming in Deleware or Las Vegas (who have business-friendly laws for corporations). All corps need a Registered Agent located in the state where you file, but there are companies that will provide this since all the RA is, is a postal box where the state and the federal gov't _know_ that mail gets through to the corporation people. (Which in itself means 'mail sent to the RA counts as received, if you don't get it it's your fault'.)

The only thing the US as a whole (i.e. the Federal government) requires is that you get a valid tax identification number, and that any shares publically traded file appropriate federal paperwork.

Cheers,
Sandy
sandy@rpg.net

[RPGnet Columns]

Post originally by Tim Gray at 2002-09-08 13:46:12
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You'd probably find some differences between the law in Scotland and that in England and Wales. We also have "registered addresses" for companies.

[RPGnet Columns]

Post originally by Stuart Purdie at 2002-09-09 09:14:56
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There are a number of different types of busniess entities in the UK.

Sole trader. Identical to the Doing Business As mention in the column.

Partnership. A jointly owned business, with full personal liability. Much as sole trader, except that there can be more than one owner. Most Accountant, soliciter and barrister firms are parnerships (I suspect that they're not afraid of the personal liability aspects).

Limitied liability partnerships. Relativly new. Don't know anything about them, except that they require some disclosure, in return for some limiting of liability.

Limitied companies. The company is owned by a person or group of people. There are discosure demands (annual accounts) to the owners, and some public discosure (I believe). The ownership shares can be subject to restrictions on trading (e.g. you might only be allowed to sell your part to another familiy member). There is a board of directors that run the company.

Public Limited conpanies. Similar to above, except that there is greater duty for discolsure (e.g. the board of directors is public knowledge, as is thier salary). They need not be listed on the stock exchange, although no restrictions can (usually) be placed on trading shares. Only PLC's can be listed on the stock exchange.

Unless you have acess to nearly free acounting (and auditing) services, then your going to be best sticking at a sole trader / parnership. A reasonable rule of thumb is that if the turnover is more than your total assets (some say half your assets), then you want the liabilty limited in some form. Additionaly, if it goes wrong, and you could see a large bill laid at your door (extremely unlikely for a RPG design outfit, less so for, say, a web provider firm hosing e-commerce RPG outlets), then you want to limit it too.

This is not legal advice, and is not warrantied to be free from errors in any fashion. You know that standard disclaimers....

[lawman02]

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