GLOSSARY

Partnership

A business carried out by two or more people in which each is 'jointly and severally' liable for the debts of their business.

PAYE

Pay As You Earn. A scheme that every small business employing people must set up and administer to pay income tax and National Insurance contributions to the Inland Revenue.

Pricing

This is the process of calculating how much you will charge for your service, or product. It may be calculated using a variety of different methods, the most common of which are: Cost Plus, Market pricing and Competitor Pricing. It is fully described, with examples in the section of the BDP on Costing and Pricing.

Patent

 A patent gives an inventor the right for a limited period to stop others from making, using or selling an invention without the permission of the inventor.

Patents are generally interested in functional and technical aspects of products and processes, and must fulfil specific conditions to be granted.

Most patents are for incremental improvements in known technology - evolution rather than revolution. The technology does not have to be complex.

Patent rights are territorial; a UK patent does not give rights outside of the UK.  Patent rights last for up to 20 years in the UK.

It is not always clear who owns an invention, and there are potential pitfalls with patents. Despite these, a patent can be of use to an inventor, and can also benefit others people. You can arrange, through means of a licence or sale to use another inventors patent. Additionally, large amounts of information can be learnt from other peoples patents.

Depending on where you wish your patent to be in effect, you must apply to the appropriate body. In the UK this is The UK Patent Office.

PLC

A public limited company is a company which is registered as such and complies with the following:

* it must state that it is a public limited company both in its memorandum and in its name. The memorandum must contain a clause stating that it is a public limited company and the name must end with "Public Limited Company" or "PLC" (or the Welsh equivalents "Cwmni Cyfyngedig Cyhoeddus" or "CCC").

* the memorandum must be in the form specified in Table F of the Companies (Tables A to F) Regulations 1985, or as near to that form as circumstances permits.

* it must have an authorised share capital of at least £50,000.

* before it can commence business, it must have allotted shares to the value of at least £50,000 a quarter of which, £12,500, must be paid up in cash. Each share allotted must be paid up to at least one quarter of its nominal value together with the whole of any premium.

Companies House regulations regarding PLCs are more stringent than for other limited companies. In particular a PLC has only seven months from year end to file accounts. Private companies have 10 months.

PLC has access to capital markets and can offer its shares for sale to the public through a recognised Stock Exchange, and can issue advertisements offering any of its securities for sale to the public. In contrast a private company may not offer to the public any shares in that company.

However there is no requirement for a PLC to have stock market listing.

As a legally separate person, a company can:

* own property

* employ people

* act as director or secretary of another company

* enter into contracts

* sue in the courts

* be sued

Pre-tax profit

The residue (or loss) after all expenses (wages, rent, raw materials etc) have been subtracted from turnover.

Profit & Loss

The P&L deals with sales, cost of sales, and the profit & loss a company has made in a period of time, usually a financial year.

Profit Margin

The ratio by which a company's income exceeds its outgoings. A company thst spends £1000 on goods and sells them for £1200 is making a 20% profit margin.

Running Costs

Also known as fixed costs, indirect costs or overheads and are the costs incurred in running your business - whether you sell or not - they include things such as telephone, rent, rates, heat, light, vehicle running costs, business insurance, depreciation on capital equipment, consumables, advertising, stationery, etc. by deducting running costs from your gross profit you will have a net profit (taxable)

Receiver

A person appointed to collect and manage the assets of a company, or partnership in serious financial difficulties. In the case of bankruptcy, the assets may be sold and distributed by a receiver to creditors.

Receivership

A company in the hands of the receiver is in receivership.

Regulations

Rules and laws derived from legislation or international treaty

Registered Office

The legal address of the company as recorded at Companies House. An appointed representative of the company should always be available here to receive mail. May be the main trading address of the company or could be the address of the company's accountants, solicitors or associated company. Must be an address in the UK. If you change your registered office, notify Companies House using form 287.

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