Questions and Answers
When students, volunteers or teachers ask LEAP questions that are
of interest to other Companies, they will be posted on this page
so that they can easily be accessed by everyone.
To ask a question either email Miles Mount LEAPinformation@yahoo.co.uk
or visit the LEAP blogspot www.leedsenterprise.blogspot.com which
is now being used to collect comments and questions to be answered
and where appropriate listed here.
If you have a question about bank accounts then contact Donna
Booth donnabooth@hsbc.com
Accounts & VAT
1.
I can't work out what CR and DR mean!
On all the sheets CR refers to money going out (costs, cash - bank
transfers etc.) and to money coming in, except for the ETB sheet,
where they are reversed. Is this a mistake, or is there something
I don't understand? open
pdf with answer
2. How do I open a bank
account? download a powerpoint
presentation 140 kb on bank accounts.
3. We are selling Children's
clothes that do not have VAT on them - do we have to pay LEAP-VAT
To keep life simple we assume that all purchases
have VAT included and therefore all Sales must include LEAP-VAT. This
is not as bad as it seems since a) you can subtract all the
theoretical VAT from your purchases off the LEAP-VAT owed on
sales at the end of the year, and b) the accounting spreadsheet
does all the calculations automatically!
4. We are going to be producing canvas tote bags
filled with fairtrade, organic and recycled goods. All of the profits
(income minus expenditure) will be given to charity. The main focus
of the business is the charity, and we would like to request that
we are permitted to not charge / pay VAT.
I note your request for exemption from LEAP-VAT
and although I am sympathetic there are two reasons why the answer
is unfortunately NO.
1. We charge VAT mainly as a learning exercise since all businesses
have to pay VAT and the VATman is the most powerful government
agency around, able to fine. requisition eqipment and even
close down a business. If you ever run a
real business you need to be completely on top of VAT.
2. All the companies [or nearly all] give their profits to charity and if we
exempt one then we have to do it for everyone, and part of the way we cover our
costs of meetings and competitions is the VAT payments.
Please note:
3. We assume that ALL purchases of goods have VAT included [this is calculated
automatically by the accounts spreadsheet] and all of this VAT can be subtracted
off the LEAP-VAT owed.
4. If you have shareholders you cannot say that all your profits will go
to charity since if you do this can jeopordise our charitable status. You
can say that subject to shareholders approval it is planned to donate profits
to charity.
Selling shares
1. What is the maximum amount I can raise by selling shares?
To
start-up a company you will need some capital [money]. The
first requirement is to pay the registration fee of £150,
which covers insurance and support. You also need to purchase
the materials to make your product, pay trade fair fees etc.
The usual way to obtain the initial capital is to sell
shares. The company secretary can download share certificates
from the download page. Each member of the company should
buy some shares, and you should also sell them to friends
and family.
The shares are sold at £1.00 each. Normally we restrict
the amount of capital that can be raised by shares to £400.00,
but if needed you can raise more - with the permission of your
Enterprise Teacher, Business Mentor and a Board member from LEAP. The
reason for this restriction is that the shareholders will expect
their investment back and possibly a dividend [a return on
their Investment] when you close the company at the end of
the year.
You can also raise money by Sponsorship but this is
less usual in a real business - although you might want to consider
this a way to get t-shirts printed with your company name and logo
for use at Trade Fairs. Perhaps the sponsor's logo can also be
printed on the T-shirt [but do not allow this to dilute your message
or recognition].
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