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Course: BUSI 111
Small Business Management
Assignment
Individual
Steps on starting up a business in T&T
BUSI 111 Small Business Management
Individual Assignment
Due Date: 30-Oct-08 Mark: 10 %
Guidelines
At the beginning of this semester, you were asked to conduct research on the
business environment in Trinidad & Tobago
...
How do you start up a business in T&T
2
...
Section 1 should address the steps required to start up a business in T&T
...
Different industry and/or governmental
bodies provide some form of assistance, for example, Financial, Agriculture,
Tourism, Trade, UN, Social Development, etc
...
State the eligibly requirement
...
Benefits
...
What impact did
this research have on you – positive or negative? Was it useful, how, why?
Section 1
Steps required to start up a business in
Trinidad and Tobago
When starting a Business in Trinidad and Tobago, determining on the type of
venture
...
This table summarizes the procedures and costs associated with setting up a business in
Trinidad and Tobago
...
After 4 days, the
promoter must return to the
Registry to collect the
approved (stamped) form
...
If an attorney-at-law is not
engaged in the company
formation, a statutory
declaration by a person named
in the incorporation documents
as a company director or
secretary must be sworn to
before a Commissioner of
Affidavits
...
The company is legally
registered and acquires its own
legal personality on the day
TTD 600
that properly completed
(TT$400 for
incorporation documents are
Form 1; TT$
filed in person with the
40 for
Commercial Registry, along
Form 31; TT$
with the required fee
...
The following documents must
be filed in duplicate: (a) Form
5*
6
Make a company seal
Apply for tax payer
identification number
2 days
1 day
TTD 115
no charge
7*
Apply to register as
an employer with
social security (obtain 1 day
national insurance
number)
no charge
8*
Receive employer’s
registration number
no charge
30 days
25, the company name request
application; (b ) Form 1, the
embossed articles of
incorporation; (c) Form 31,
Statutory declaration of
compliance; (d) Form 4, Notice
of address of registered office;
(e) Form 8, Notice of directors;
and (f) Form 27, Notice of
secretary
...
The TTD 115 quoted is for a
rubber company seal
...
To apply for a taxpayer
identification number, the
company applies with the
Board of Inland Revenue for a
corporate file number and a
pay-as-you-earn file number
...
The employee is required,
within 7 days of employment,
to provide the company with
the information needed to
complete Form NI 4,
Application to register as an
employed person
...
It
takes about 4 weeks for the
social services authority to
notify the company that the
application is in order and to
supply the company with the
employee’s national insurance
number
...
1 and VAT No
...
The company
can start operating without
being registered for VAT and
apply only once it has reached
the TTD 200,000 threshold
...
Please note * Takes place simultaneously with another procedure
Types of businesses
Sole Traders
This is the most common form of business organisation
...
Although
there is a single owner in this business organization, it is common for sole traders to employ others,
but the firm is likely to remain very small
...
All sole traders have unlimited
liability
...
This can discourage some potential entrepreneurs from starting
their own businesses
...
Many sole traders remain small
because the owner wishes to remain in control of their own business, but another reason is the
limitations that they have in raising additional capital
...
This type of business
organization is most commonly established in the construction, retailing, and hairdressing, carservicing and catering trades
...
They are
agreements between two or more people to carry on a business together, usually with a view to
making a profit
...
When planning to go into partnership it is important to choose business
partners carefully – the errors and poor decisions of any one partner is considered to be the
responsibility of them all
...
Partnerships are the most common form of business organization in some professions, such as law and
accountancy
...
Many other owners of businesses prefer
the company form of organization and these are considered
Limited Liability companies
The ownership of companies is divided into small units called shares
...
It is possible to buy just one share but usually
these are owned in blocks, and it is possible for one person or organization to have complete control
by owning more than 50% of the shares
...
All shareholders
benefit from the advantage of limited liability
...
Small
firms can gain this protection when the owner(s) create a private limited company
...
The individual will
be personally liable
for all debts if the
business fails
Not a separate legal
entity
Often difficult
separating personal
from business
Sharing of
knowledge,
skills and
resources
All partners
have joint
and several
liability for
any debts
No limit on the
Not a
number of
separate
partners
legal entity
Limited
opportunity for Can only
sell business
income
through sale
sharing
The greater risk of the company
failing to pay its debts is now
transferred from investors to
creditors (those
suppliers/lenders who have not
been paid)
...
Legal personality
...
Nobody
can make any
further claim
against
shareholders,
should the
Company fails
...
This
means, for example, that if the
foods sold by a company are
found to be dangerous or faulty,
the company itself can be taken
to court – not the owners, as
would be the case with either a
sole traders or a partnership
...
This does not take all legal
responsibilities away from the
managers and owners
...
They
must still act responsibly and in
accordance with the stated aims
of the business and within the
law
Continuity
...
All that happens is
that ownership continues
through the inheritance of the
shares, and there is no break in
ownership at all
...
Opportunities
TOURISM AND INDUSTRIAL DEVELOPMENT
COMPANY OF TRINIDAD AND TOBAGO LIMITED
Tidco is a company that was developed to assist tourism industries in
Trinidad and Tobago
TIDCO
The company's mandate is to market, promote and be an investment facilitation agency
with respect to the country's exports of goods and services, and the development of its
Tourism and Non-Energy Industrial sectors
...
Investment incentives
...
The
Division is positioning Trinidad and Tobago as the location of choice in the Americas for
doing business, and acts as a one-stop-shop for potential investors
...
Trade and Industry
...
Its primary work
involves enhancing the competitiveness of the local export sector by identifying and
nurturing those industries that are internationally competitive and can lead to sustainable
economic development for Trinidad and Tobago
...
It executes the policy framework outlined in the Tourism Master plan
...
Several niche markets have been identified, including
Eco-Tourism and Soft Adventure, Sports, Cruise Shipping and Business and Cultural
Events
...
This currently consists of the corporate site, at http://www
...
co
...
It provides comprehensive tourism-related information
...
investTNT
...
In addition, the establishment of a local Trade Point Centre at TIDCO makes
international trade more accessible to local enterprises, by providing them with access to
advanced technologies and information networks
...
tradetnt
...
Corporation Tax Concessions
Under the Income Tax Act, there is an annual wear and tear allowance of 10% of the
capital expenditure on construction of a building or structure or in respect of capital
improvements made on or after 1st January, 1995
...
In respect of plant and machinery acquired after 1st
January, 1995, there is the introduction of the pooling of such assets for the grant of wear
and tear allowances
...
Under the Corporation Tax Act, tax credits are available to special classes of companies
as set out in the following paragraphs
...
Incentives to Hotel and Tourism Industries
With a view to encouraging the development of the hotel industry in Trinidad & Tobago
and to stimulate tourism development generally, the Hotel Development Act provides
incentives to both Hotel Owners and Hotel Operators
...
The details of the incentives are:
Tax exemption for a period of 5 to 10 years
...
A capital allowance in respect of approved Capital Expenditure
...
Carry over of losses incurred by owner and or operator during the tax exemption
period
...
Tax exemption to the financial institutions on interest on approved loans for a
maximum period of 10 years or the period of the loan, whichever is less
...
Initial allowances of 50% on purchase of plant and machinery reduced in certain
industries to 20%
...
Annual allowances of a reasonable amount for wear and tear on plant and
machinery
...
Investment allowance for capital expenditure in respect of production business
on land equal to 150% of the expenditure, that is, 40% in year 1 and 20% in the
following five years
...
Learning outcomes of this project
This assignment would assist me in considering which entity is best to conduct my
business activity through
My present circumstances Finances – how much is need to set up the business
When I am ready and have the time to commit myself
My commercial objectives –
How to establish my business to be a profits-making venture
The risks of the venture –
Causes of losses/ failure
The level of control you desire Related to the reality and limit of my achievement
The taxation implications of holding the investment through that
entity Required tax for the different types of businesses and the why it is
compulsory
...
The internal structure i
...
, employees
-who will manage the entity
This assignment would also assist me in decision making, the information needed to
make them and the techniques that can assist managers in this important task to have a
good understanding of the economic environment in which a business operates
...