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Post Info TOPIC: In unusual circumstances - Finding an accountant.


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In unusual circumstances - Finding an accountant.


Hello everyone.

I'm James and I live in Norfolk. I have been enterprising throughout my career to date, with a number of mistakes to my name, I am quite determined to learn and carry on.

I have had another idea, and after much thought have decided to give it a go. My idea is current and relevant and solves a problem.

One of the latest lessons for me to learn is that it's better to have 20% of something good, than 100% of something stressful, re; business ownership. So I am going about things differently, this time I have been drafting in the skills required to turn a brand idea into a complete product. Instead of paying up-front for the skills, or attempting to replicate these skills with mine, I have exchanged brand part-ownership for my colleague's time. So now there are three of us, a designer, a media person and me. We are looking to acquire more skills to complete the team, and naturally we need an accountant. I have absolutely no idea how to find this person without just pasting it on facebook.

If you can please help me with any of the following questions, I would be most grateful:

Is there a terminology for the type of arrangement I am describing?
Do accountants ever work like this?
How and where might I go about finding this person?

Thank you in advance,

Sincerely, James.



-- Edited by James in Norfolk on Saturday 23rd of June 2018 03:24:45 PM



-- Edited by James in Norfolk on Saturday 23rd of June 2018 04:38:16 PM

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Guru

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James in Norfolk wrote:

How and where might I go about finding this person?


Hi James

Apparently when you find the right person you will just know!

On a serious note why don't you just contact some accountants local to you or your business and arrange an appointment, most will offer an initial meeting with you free of charge.

Good luck



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Doug

These are only my opinions of how I see things and therefore should not be taken as advice



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@Artois Thank you very much for your response.

I had considered this option, but I am unsure about how to phrase my proposition to be efficient about my enquiry.

Is this something normal to the industry? Is there an existing framework or known phrase for 'skills for shares'?

Sincerely, James



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Master Book-keeper

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No need for @

Hi James
'Skills for shares' - in what precisely?


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Joanne

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Thank you for your reply.

The business we are putting together is shared amongst its contributors. So we are putting our skills together, and consequently co-owning the business.

It is an environmental brand, a basic bulk-purchase - repackaging setup which we intend on being almost fully automated. I know you asked precisely what, sorry. I am however able to communicate that information privately somehow.

Sincerely, James



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James in Norfolk wrote:

I had considered this option, but I am unsure about how to phrase my proposition to be efficient about my enquiry.


If you are unsure how can you expect anyone to help, at the end of the day this is your business plan and an accountant can only offer advice on the concept that you propose.



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Doug

These are only my opinions of how I see things and therefore should not be taken as advice



Master Book-keeper

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James in Norfolk wrote:

Thank you for your reply.

The business we are putting together is shared amongst its contributors. So we are putting our skills together, and consequently co-owning the business.

It is an environmental brand, a basic bulk-purchase - repackaging setup which we intend on being almost fully automated. I know you asked precisely what, sorry. I am however able to communicate that information privately somehow.

Sincerely, James


My question was not about your your business idea but about your comment about 'ownership'

You mentioned in your OP that you had ''exchanged brand part-ownership for my colleague's time'' but then mentioned in your next post 'skills for shares'.

So my question was to get to the nub of what the you were specifically exchanging/had already exchanged ie what exactly have you already given to the existing people ( a tax mans dream, if you havent already got that right - for all of you) and then how would you extend this (and potentially water down any of their existing share) for anyone else you may take on?

Ie how are you legally giving them part of a 'brand' or 'business' - what structure does that brand have now/moving forward and what structure does that business have now and moving forward?

No structure=no value (albeit still there are tax consequences)



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Joanne

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.



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Artois wrote:
James in Norfolk wrote:

I had considered this option, but I am unsure about how to phrase my proposition to be efficient about my enquiry.


If you are unsure how can you expect anyone to help, at the end of the day this is your business plan and an accountant can only offer advice on the concept that you propose.


This is why I'm here, so I know how to ask others in the profession without confusion. I will try to articulate in my next response.



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Master Book-keeper

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James in Norfolk wrote:


This is why I'm here, so I know how to ask others in the profession without confusion. I will try to articulate in my next response.


Not sure if Im missing the point, but surely answering the questions asked would help.

Either that or the best we can do is:-

http://www.accaglobal.com/uk/en/member/find-an-accountant/find-firm.html?isocountry=GB

https://www.icaew.com/about-icaew/find-a-chartered-accountant



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Joanne

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.



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Cheshire wrote:
James in Norfolk wrote:


This is why I'm here, so I know how to ask others in the profession without confusion. I will try to articulate in my next response.


Not sure if Im missing the point, but surely answering the questions asked would help.

Either that or the best we can do is:-

http://www.accaglobal.com/uk/en/member/find-an-accountant/find-firm.html?isocountry=GB

https://www.icaew.com/about-icaew/find-a-chartered-accountant


and find a good business lawyer or this will bite you in a year or two



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I thought I had posted this last night, but I see it's not in the thread...

Thank you again for your reply.

I'm sorry I think using the words 'skills for shares' was probably misleading. I'm not good at writing, I waffle!

The situation is this; I have invited people with different skills to join me in launching a product/business. To greatly reduce start-up costs, I propose for these people to become partners who own a part (percentage share) of the brand. I know this is a common "some mates get together and start a business" situation, however, we would also like an accountant to join us with the same understanding, to provide services in return for part ownership.

Officially, nothing has been given to anyone by anyone. We've had verbal agreements on how we'd like to proceed, and really the next step is to find the accountant who can help. So we have no structure. Eventually I would like to see a balance in ownership between all people involved. I see this as a community-hobbyist enterprise, which will be part-time and occasional, but also has a firm goal to generate revenue.

It may be as straightforward as a partnership agreement.



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Hi James,

you will have difficulty there as if the person is a real accountant (not everyone who calls themselves an accountant is!) then they would be breaching their duty of independance to take shares in your venture.

Accountants cannot become too involved with the companies that they represent or they may slip[ into advocacy which undermines their fundamental duty to act objectively. Only an account not involved in your business could take shares in it but that would defeat the object of why you wanted to give them shares in the first place.

As a free peice of advice, I have seen many partnerships and I have never seen one that works as unless people are only investing money every person thinks that they are contributing more than the next person and even the best business plans end up crashing in flames. My advice would be to find some other way to get your business off the ground whilst remaining in total control of it.

kindest regards,

Shaun.



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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.



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Shamus wrote:

Hi James,

you will have difficulty there as if the person is a real accountant (not everyone who calls themselves an accountant is!) then they would be breaching their duty of independance to take shares in your venture.

Accountants cannot become too involved with the companies that they represent or they may slip[ into advocacy which undermines their fundamental duty to act objectively. Only an account not involved in your business could take shares in it but that would defeat the object of why you wanted to give them shares in the first place.

As a free peice of advice, I have seen many partnerships and I have never seen one that works as unless people are only investing money every person thinks that they are contributing more than the next person and even the best business plans end up crashing in flames. My advice would be to find some other way to get your business off the ground whilst remaining in total control of it.

kindest regards,

Shaun.


Thank you very much Shaun,

This information is what I needed. I might just have to find another way around this one then.

If possible, would you also be able to answer these two;
Is a bookkeeper bound by the same code of conduct?
Are you aware of other professions that have similar codes?

Sincerely,

James



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Forum Moderator & Expert

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Hi James,

Accountancy, banking and the legal profession are very close bedfellows when it comes to professional ethics. Each professional bodies interpretation of their ethical code is slightly different but it all boils down to the core of :

  • Act always with integrity
  • Act Objectively
  • Behave Professionally in both your business and personal lives
  • Treat all data confidentially
  • Act with professional competence and due care

The core is that nothing that we do should bring the profession into disrepute.

Bookkeepers are bound by the ethical code of their professional bodies but bye and large it is generally much lighter touch than the professional ethics of accountants.

Where bookkeping and Accountantancy become someowhat muddied is at AAT where a fully qualified MAAT is an SME accountant but anything below MAAT is really a bookkeeper. There is probably a little debate to be had about where the crossover actually occurs but painting with a wide brush stating that MAAT's are SME accountants is not wide of the mark.

There are numerous professional bodies but the main two for financial accountancy are ACCA and ACA (ACA is a catch all phrase to cover ICAEW, ICAS and CAI). You will probably often hear them bandied around as either Chartered Certified (ACCA) or Chartered (ACA).

Where things get really confusing is that not everyone trades under the banner that they trained under, so there are actually ACCA trained accountants out there trading as AAT because they have not been able to meet the ACCA's very stringent practice certificate criteria.

I can understand your business model which is very much based on the silicone valley approach of getting skilled developers on board by giving them a stake. But the key is that you need to divorce that stake in the business from any say in the decision makeing process which is where it becomes a partnership and things fall appart. There are various options including various clasifications of non voting shares, preference shares, bonds, etc. If you incorporate you can set up multiple types of shares including non voting shares.

When you find an accountant, if they don't understand different classifications of shares and the business model that you are looking to set up then find another accountant.

As I say though, although paying for skills of the workers in the firm with shares works, accountants need to be paid in sterling... But remember that the first meeting is generally a free consultation where the parties are getting to know each other (not least for money laundering checks). If you are not expecting cashflow for some time, most practices will try to work around you provided that they feel that they will get paid in a reasionable timeframe (say within 12 weeks). However, where a business is at the stage of putting together a business plan you may find that money is expected up front as many plans never get off the ground and accountants don't like to spend their time working for free! Be prepared to factor that into your startup cashflow plans.

hope that makes sense,

kindest regards,

Shaun.



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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.



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yes bookkeepers have an ethical code



-- Edited by Casu on Monday 25th of June 2018 08:17:35 AM

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