When you start a business, the aim is to increase the number of assets in the company’s possession. However, even if you don’t have many assets to begin with, you will have some valuables to your name. And, it’s vital to understand them thoroughly if you’re going to use them to the firm’s advantage. It’s tempting to think that cars or investments are simple to comprehend, yet they take on a different meaning when you’re an entrepreneur. So, here are four facts that you will want to remember as your list of ‘property’ gets bigger and bigger in the not-too-distant future.
This is a contributed post. Please refer to my disclosure for more information
They Don’t Have To Be Concrete
Obvious assets are concrete, such as office space and vehicles. They are the things that you can touch and feel and see with your eyes. But, these valuables are one side of the coin. On the other, you have intangible goods. Your company might not secure them now, yet they could be deal-breakers further down the line. Intellectual property is a prime example. Trademarks, copyrights, and patents prevent other enterprises and individuals from stealing your ideas and selling them as their own. However, you have to file for TMs and the like; they aren’t processed automatically.
Buying Assets Isn’t The End Of The Line
Please don’t assume that once you purchase an asset that you have no more leverage. Some things, like stocks and bonds, are non-negotiable, but that doesn’t apply to company vehicles. At CVS, the AA Warranty Dealer Care service is an extended guarantee that covers a wide range of issues. The dealer and AA will fix any problems that occur during this period for free, reducing your liability. Not all sales or leases come with extended warranties, so you must do your research before signing on the dotted line and include add-ons that cover the firm’s back.
Depreciation Can Be Positive
You’ve made an investment that has lost money, and you’re distraught. The budget doesn’t leave any room for error, but an asset that was supposed to be valuable has tanked. It’s a bitter pill to swallow, yet it can also be a blessing in disguise. Thanks to tax loopholes, when an asset loses money, you can add it to your expenses and cut the costs of your return. The key is something called “Accelerated Depreciation” that allows you to write-off specific company property. Of course, you shouldn’t go into an investment hoping to lose out; however, it can be a silver lining if you choose your purchases wisely.
Records Are Essential
The government isn’t going to take you at your word, not when tax write-offs are huge, or when patents hand you a monopoly. To get what you want, you’re going to have to provide proof. Intellectual property laws walk you through the process. However, what most businesses don’t realise is that HMRC only gives you one chance. So, if you don’t have detailed purchasing records, the government will hit you with a fine. The next time, it could be a fraud charge.
Therefore, well-kept records and receipts are integral.