Essay
BTEC Unit 36 Starting A Small Business P4 (Pass)
- Course
- Institution
- Book
BTEC Unit 36 Starting A Small Business P4 (Pass) and the Cash Flow statement, P&L Account and Balance sheet.
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
More summaries for
-
LBO MODELING EXAM FROM WALL STREET PREP EXAM 2024 WITH ACTUAL QUESTIONS AND COMPLETE 100% VERIFIED CORRECT AND WELL EXPLAINED ANSWERS WITH RATIONALES GRADED A+ BY EXPERTS LATEST VERSION 2024 WITH GUA...
-
WGU C213 OBJECT ASSESSMENT ACCOUNTING FOR DECISION MAKERS 2023/ 2024 EXAM WITH ACTUAL QUESTIONS AND COMPLETE 100%CORRECT ANSWERS WITH VERIFIED AND WELL EXPLAINED RATIONALES ALREADY GRADED A+ BY EXPERT...
-
NATIONAL PILATES CERTIFICATION EXAM WITH ACTUAL QUESTIONS AND COMPLETE 100%CORRECT ANSWERS WITH VERIFIED AND WELL EXPLAINED RATIONALES ALREADY GRADED A+ BY EXPERTS |LATEST VERSION 2024 WITH GUARANTEE...
1 review
By: Steph271 • 4 year ago
Seller
Follow
HasnainButt
Reviews received
Content preview
P4:Describe the legal and financial aspects that will affect the start-up of the business.
When starting up a new business, the owner needs to decide the company’s legal status. I will be
running my business as a sole trader which means I will be the only owner. I will have a employee to
provide his specialism and skills which I don’t have. I have chosen for this, because all responsibilities are
in my hands and all profit made by the company will be mine, because there are no partners or
shareholders involved. It is also easier to make decision, because if it is a partnership I would have to
continuously ask my partner for agreement before making a decision and if I had a good idea on which
he didn’t agree we could lose potential money. The legal status of my company is a sole trader. The legal
liability for my business will be that I have unlimited liability for the business. I will be personally
responsible for the company’s debts. If the business somehow fails and I owe money to creditors, the
court can seize my personal assets such as; my car, house or savings to pay off the debt.
Tax regulations
Since my company will work out of The Netherlands the tax must be paid to the Dutch government. The
Belastingdienst is the tax collector in The Netherlands. It is part of the ministry of finance in The
Netherlands. Whenever you’re living in The Netherlands and earning money you have to pay taxes.
Income tax is one of these you must pay. People in the Netherlands need to declare their income tax
through the annual tax return which can be done online. But since I am self-employed I need to
calculate and pay my income tax trough the annual tax return online. The Belastingdienst also collects
taxes from the sales and revenue of businesses. This is known as BTW (Belasting Toegevoegde Waarde).
All businesses must add the BTW to the price of their goods and service. In my case the BTW percentage
will be 21%. At the end of the quarter I must calculate the BTW hat I have spent and earned via the sales
tax declaration. This amount must be paid to the Belastingdienst. Another tax I must pay is the import
tax, when importing goods from other EU countries import tax is not needed to pay however since my
products will be imported from china so the tax will be 2.5% for amounts higher than €1.000.
Terms and conditions of my business
It is important that my company has clear terms and conditions which clearly explain all the legal
expects like; pricing, payment terms, credit facilities and delivery options. Terms and conditions set the
contract foundation between the company and the customer. The terms and conditions are there to
protect my business, explain procedures to customers and explain what the customer agrees on when
accepting it. The terms and conditions will be written and accessible for customers if they are interested
in reading them and customers must agree with them before purchasing a product. An Example of a
term which the customers will have to agree upon is; intellectual property all visual media is created by
my company which makes it my property, so no one can copy it. I will be buying materials to produce my
product which will mean I will have to read and agree the terms and conditions of my suppliers. An
example of a term the supplier might have could be that the invoice must be paid within 30 days when
the products are delivered.
Trading standards
Trading standards is a local government service which protects consumers from fraudulent businesses.
Since I am a new business owner I need to be aware of the legal obligations under the trading standard.
Customers must experience a good time when purchasing something from my business. If this isn’t the
case the customer can file a complaint to the TSI about my company. The TSI will respond and
investigate the complaint and do an inspection to make sure my business complies with the law. I will
make sure all my products are originally made by company and are not counterfeited goods from big
, brands, so that no customer can file a complaint against me. I must also be aware of my rights and
obligations when dealing with my suppliers. Since all my products will be shipped to The Netherlands
and will be delivered to whatever country the customer orders it from I will have to file complaint at the
Dutch trading Centre ACM (Authority for Consumers and Markets) or De Consumentenbond.
Licenses
After doing some research I have found out that I don’t need a specific license to sell and produce my
product. However I do need to apply my business at the KvK (KamervanKoophandel) which is the Dutch
trade register. All new companies must register themselves there, so the people that do business with
them know that this is a registered company. In the trade register you can find information like; which
company you’re dealing with, who the owner is, if the company is in bankruptcy and other contacting
info about a company. Other than that I need to select a domain name for my web shop and register it.
it is important this is an original name which isn’t used by another company.
Financial record keeping
All businesses are required by law to keep their financial records save for at least 6 years. Some
documents however are required to kept at all time. These documents are; Cash book/spreadsheet,
sales and purchase ledger, wages and petty cash books and accident books. Also I will keep record of all
my financial records just like other companies. The benefit of always keeping your financial records is;
that you will know when a bill has been paid and when it still needs to be paid. It also keeps u updated
on how many money you owe and how much you’re owed. I will also have to hold on to the documents
which I explained before, because these documents show the money my business has made with the
sales of my product and they also show the wages, salaries and insurances paid by my company to my
staff. The petty cash book will show all the small cash paid transactions by my company. I will also have
to keep record of accidents and injuries that have occurred by regulations.
National and International Laws and Acts
Just like for any other business also mine has to comply with legislations. The main national legislations I
will have to comply with are; paying employees, working hours, rest breaks, work time, holidays, VAT
and discrimination. When hiring employees I will be focusing on man and woman which are 21 years
and older, because they can usually work fulltime and have some experience. In The Netherlands the
minimum wage for someone with the age 21 years or older is €9,44 in December 2019. The maximum
working week is 5 days in The Netherlands. Employees have the right to 4 times the hours the
employees works every week. For example if my employee worked 25 hours every week, he will have
right to 100 hours of vacation which comes around 4 weeks. Work breaks in The Netherlands are 30
minutes if a employee works for 5,5 hours or longer. My employees will be working from 9 till 5. Like I
explained before the VAT in The Netherlands is called BTW which is paid to the Belastingdienst. Almost
every business in The Netherlands pays BTW. Depending on your branche this can either be 9% or 21%,
in my case this will be 21%. Customers will have to pay the 21% of BTW with the price of the product.
The BTW which I receive from this sale must be paid to the Belastingdienst. Also I need to pay BTW for
the purchases I make from my suppliers. This BTW can be deducted from the BTW which I paid to the
Belastingdienst from the product sales. The last legislation I need to keep in mind is discrimination. I
cannot not discriminate on the grounds of; gender, age, color, race, religion or nationality. All employees
must be treated equally and no job applicant can be denied for the job on base of one of the things
which I mentioned before.
Regulatory bodies to deal with
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller HasnainButt. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $4.81. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
53022 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now