Reaching your twenties is an exciting milestone for most as it means you’ve officially entered adulthood. Along with that milestone comes new responsibilities and worries that we didn’t picture when our teenage selves dreamed of turning 21. We imagined our college graduation, moving into our first apartment, and launching our new career. That vision didn’t include dealing with student loan debt, taking on a low paying entry-level job, or having to confront that despite spending 4 years in college, you’re still unsure how the world of personal finance actually works.

It’s easy to dismiss it all because well you’re a 20 something, and you’ll have plenty of time to play catch up. The reality is that each decade plays an important role in our future financial health. Take the time now to learn about your money and follow the money moves outlined below to put yourself on a path of lifelong financial success and eventual freedom.

Money Moves to Make in Your 20’s:

Learn How To Budget

Building a budget doesn’t have to be overly complicated or time-consuming. It’s actually the first step in putting yourself in control of your finances because it means you know where your money goes each month. The good news is that there are lots of apps and online tools that can make the process a breeze. Consider a system like Mint that will connect to your accounts and automatically categorize your spending for you. The right budgeting tool is simply the one you’ll stick with long term.

Pay Off Debt

Debt isn’t all bad. It may be the reason you were able to earn your degree, and a mortgage may help you one day buy a home. It can also quickly overrun your life if you aren’t careful. Now’s the perfect time before life gets more hectic with family commitments to buckle down and tackle any loans or credit card balances so you can be debt-free going into your 30’s.

Build a Cash Cushion

The financial downturn caused by the pandemic has reminded the whole world of the importance of having an emergency fund. We don’t know what life is going to throw at us and having a cushion can help you navigate the uncertain times. Though it’s not all about having a secret stash of cash to deal with the bad news of life (medical bills, car repair, layoff), it can also be about having the cash to seize an exciting opportunity. Having savings gives you the freedom and security to deal with whatever life brings your way – good or bad.

Understand Credit

Your credit score can dictate so much of your life. That little number can play a big role in the home you buy, the car you drive, and even the job you hold as some employers (especially in the finance world) will pull your credit. It’s important that you check your credit report and score (also available through Mint), learn how it’s calculated, and work to improve it.

Money Moves to Make in Your 30’s:

Invest For Retirement

Now that you’ve spent your 20’s building the foundation for your financial life, it’s time to make sure you’re also tackling the big picture goals like saving and investing for retirement. I typically recommend that clients save 10% to 15% of their annual income towards retirement. That may seem like an insurmountable goal, but starting small by saving even 1 to 3% of your salary can make a big difference in the future. Also, make sure to take advantage of any matching contributions that your employer may provide in your retirement plan. If, for example, they offer to match contributions up to 6%, I would try hard to work towards contributing at least 6%.

Buying Your First Home

Buying your first home is a top goal for many, but it also seems to be getting increasingly more difficult especially if you live in a major city. The most important steps you can take is to improve your credit score, pay down high-interest debt, and be aggressive about saving for a down payment. Saving 20% down will help you qualify for the best loan terms and interest rate, but there are still home loans available even if you aren’t able to save that much. Just be realistic with your budget and what you can afford. Don’t let a lender or real estate agent determine what payment will fit into your budget.

Be Covered Under These Must-Have Insurances

You’ve spent the last several years building your savings and growing your family. It’s now crucial that you have the proper insurance coverage in place to protect your assets and your loved ones. Life and disability insurance are top of the list. Life insurance doesn’t have to be expensive or complex. Get a quote for term-life that will last a set number of years and protect your partner and children during those crucial years that they depend on you. Disability insurance protects your income if you become sick or injured and are unable to work. Your earning ability is one of your biggest assets during this time, and you should protect it. This coverage may be offered through your employer, or you can request a quote for an individual policy.

Invest in Self-Care and Well Being

Mental health is part of self-care and wealth. Most people don’t talk about how financial stress and worry affect their overall health. When you can take care of yourself on all levels, you will feel healthier and wealthier, and happier. But it is not easy. It takes work, effort, awareness, and consciousness to learn how to detach the value in your bank account or financial account from your self-worth and value as a human being. When you feel emotional about your money, investments, or the stock market, learn ways to process them and take care of yourself by hiring licensed professionals and experts to help you.

Money Moves to Make in Your 40’s:

Revisit Your College Savings Goal

As your kids get older and prepare to enter their own journey into adulthood, paying for college is likely a major goal on your list. Consider opening a 529 plan (if you haven’t already) to save for their education. 529 plans offer tax advantages when it comes to saving for college. There are lots of online resources that can help you understand and pick the right plan for you. Visit https://www.savingforcollege.com. This is also a great time to make sure you’re talking to your kids about money. Give them the benefit of a financial education that you may not have had.

Get Aggressive with Retirement Planning

Your 40’s likely mark peak earning years. You’ll want to take advantage of your higher earnings to maximize your retirement savings especially if you weren’t able to save as much in your 20’s and 30’s. Revisit your retirement plan to crunch the numbers so you’ll be clear on what you need to save to reach your goal.

Build More Wealth

You’ve arrived at mid-life probably feeling younger than you are and wondering how the heck that big 4-0 got on your birthday cake. We typically associate being 20 with being free, but I think we’ve got it wrong. There is something incredibly freeing about the wisdom and self-assurance that comes with getting older. You’ve proved yourself. People see you as an adult. Your kids are getting older and your finances are more settled. Now’s the time to kick it up to the next level. Look for ways to build additional wealth. This may mean tapping into your entrepreneurial side to launch the business you’ve dreamed of or buying real estate to increase passive income. Now’s also a great time to find a trusted financial advisor who can help guide your next steps and help you plan the best ways to build your wealth.

Revisit Your Insurance Coverage

Insurance was crucial before, but it’s time to revisit your coverage and make sure you’re protected especially if you decide to launch a business or buy additional real estate. This is also where a financial advisor can help you analyze your coverage needs and find the policies that will work for you.

Consider Estate Planning

Estate planning (think wills, trusts, power of attorney) isn’t the most fun / exciting topic. It involves imagining your gone and creating a plan for the loved ones you leave behind. It is also often overlooked by adults in their younger years. It’s easy to assume estate planning is something the wealthy need to do. It really comes down to whether you want to decide how your life savings will be managed or if you want a court to decide. It’s also crucial for parents with children who are minors to select a guardian and have those uncomfortable conversations with their family members about who would care for the children if the worst were to happen. It’s also a good time to visit this topic with your own aging parents and make sure they have the proper documents and plans in place.

 

Whether you’re in your 20’s, 30’s or 40’s, it can be easy to put off planning your finances especially in the middle of a pandemic. Most of us are busy, and it’s easy to tell yourself that you’ll have time to work on a goal in the future. Commit to setting aside one hour each week or even each month to have a money date and review your finances. Don’t let yourself reach a milestone birthday (30, 40) and regret not being farther ahead. Follow these money moves now to seize control of your financial future.

The post Money Moves to Make in Your 20s, 30s, and 40s appeared first on MintLife Blog.

Original Source: blog.mint.com

In India, COVID-19 efforts can be combined with tuberculosis prevention help defeat both illnesses. Photo: Shubhangee Vyas
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Undefined

With COVID-19, our lives are no longer the same. The pandemic has overshadowed other health issues and reversed the progress made over decades in our fight against other diseases, including tuberculosis (TB). In India, despite sustained and aggressive nation-wide interventions, this deadly disease continues to haunt the population with one of the world’s highest TB infection rates. 

Under the National TB Elimination Program, the country has successfully treated over 20 million patients since 1997. Efforts have been afoot to further reduce the TB burden, but the COVID-19 pandemic has created serious obstacles.

However, rather than being an obstacle, the pandemic should be seen as an opportunity to simultaneously combat COVID-19 and TB, in order to avert millions of deaths.

The respiratory route is the primary mode of transmission for both infections. Interrupting it will stop the spread of both.  In addition, global strategies to control COVID-19 and TB have common key elements: early detection, diagnosis, contact tracing, and case management. Both ailments also require a whole-of-society approach and active community engagement for implementing simple, doable, evidence-based and affordable non-pharmaceutical interventions.  

The National TB Elimination Program is a good place to start this process in India. It has demonstrated the strong involvement of civil society and community leadership in prevention and management of TB. This can be used to curb the spread of COVID-19 through community outreach that seeks to reduce close contact and promote use of non-pharmaceutical interventions (e.g. respiratory hygiene) in communities, public transport and overcrowded houses.

The program has also been instrumental in finding active TB cases. This can be expanded to include COVID-19 by strengthening the surveillance for influenza-like illness. The unification of surveillance activity for communicable diseases with similar modes of transmission is prudent, efficient, productive, and cost-effective.

This success can also be attributed to the involvement/engagement of the private sector, including use of the TB notification and patient management system ‘NIKSHAY.’ This IT-based platform can be strengthened to integrating notifications and responses to COVID-19. The strategies for COVID-19 can be synchronized with TB’s four strategic pillars of “Detect – Treat – Prevent – Build.”

India has scaled up diagnostic facilities by making highly effective tests available throughout the country. This has helped to make sure more people are diagnosed, receive proper medical treatment and thus reduce transmission of infection.

One of these tests, the cartridge-based nucleic acid amplification test, is rapid, highly sensitive, specific, and also detects resistance against recommended antituberculosis drugs. This system has also been extensively used during the COVID-19 pandemic, demonstrating the possibility of cross-use and integration of this system for diagnosis of other infectious diseases. With minor modifications it has the potential to become an affordable and reliable diagnostic aid across the spectrum of infectious diseases.

The pandemic should be seen as an opportunity to simultaneously combat COVID-19 and TB, in order to avert millions of deaths.

The other, TrueNat®, is a chip-based, portable reverse transcription polymerase chain reaction (RT-PCR) machine that is the fastest available test for COVID-19. It also has the potential to become an important diagnostic tool for multiple infectious diseases.

These tests can be made more effective by strengthening diagnostic outreach in the community with well-defined referral mechanisms. 

Using the same facilities for testing TB and COVID-19, with possible expansion and strengthening, can help in successful reductions of both diseases.  India has, in a remarkably short period of 6 months, scaled testing capacity for COVID-19 from the initial 15 testing laboratories to more than 1750 labs across the country. TB detection services can benefit immensely from this feasible, affordable and quality service network-based delivery model.

Prime Minister Narendra Modi has launched the Tuberculosis Free India Campaign (TB Mukt Bharat), presenting his vision to eliminate TB from India by 2025. Similar leadership has been shown in managing the pandemic. India even allocated about $10 million to the COVID-19 Emergency Fund for fighting the pandemic in the neighboring countries in South Asia. The pandemic response can benefit from adopting best practices in India’s TB program, including telemedicine, doorstep delivery of drugs, insurance coverage, improved logistics, private sector partnerships and other benefits to community and frontline health workers.

The COVID-19 response has put the focus on public health interventions like social distancing, use of masks, cough etiquette, and hand hygiene. Continuing these steps will help in preventing new infections of TB as well. In the long term, strengthening efforts on providing properly ventilated houses to the poor contributes to the prevention of all respiratory infections. Initiatives such as the 30-second coronavirus mobile phone ring tone produced in India can be also be used to promote control of TB and other infectious diseases.

Managing the COVID-19 outbreak can help end tuberculosis in India in other ways as well. A major challenge in TB elimination continues to be “missing cases”. Sustained awareness amongst communities on various facets of TB – including the lethal consequences of late diagnosis and incomplete treatment of TB, will encourage people to seek health services more quickly. A strong network of diagnostic laboratories – on the pattern of COVID-19 labs, is needed to confirm the diagnosis and provide appropriate treatment.

Lessons learnt from pandemic should also include integrated training on related ailments. The disease dynamics and management of TB and COVID–19 can be communicated simultaneously to medical professionals and the public to ensure uniformity and better compliance. Other diseases can also be easily integrated into these training modules or platforms for broader upgrading of skills and efficient use of training resources.

Across the world, enormous technical and financial resources are being invested into fighting the COVID-19 pandemic. Most of these are fortifying existing public health services and skills in managing cases and implementing effective measures for infection prevention and control. It will be prudent to sustain these achievements and use them to provide a swift response to future epidemics or pandemics as well as improved health services, especially those pertaining to respiratory infections.

covid, covid-19, coronavirus, novel coronavirus, corona virus, covid-19 response, communicable diseases, infectious diseases, emergency response, health response, outbreak, pandemic, covid-19 prevention, India, tuberculosis, TB, respiratory illnessSonalini KhetrapalSungsup RaPatrick L. OseweCountries: IndiaArticle

Original Source: blogs.adb.org

Language
English

Many of the workers on the front lines of the pandemic lack insurance and basic social protections. Photo: Olha Zaika

The “informal economy” is often seen as primarily daily-wage laborers, such as in the construction sector or housekeepers, but it also encompasses vast numbers of workers in short- term, usually contract jobs in the formal service sector such as hospitality, retail, and transport. It also includes those working in the new gig economy.

Their work is often characterized by uncertainty, instability and insecurity. As opposed to those in business or government employment, they bear the risks of their work and receive limited social benefits and entitlements.

The Asia-Pacific region accounts for around 60% of the non-farm global workforce, higher than in Latin America and Eastern Europe, ranging from about 20% in Japan to over 80% in Myanmar and Cambodia. They are twice as likely as formal workers to belong to low-income households and often live hand-to-mouth. If they cannot work for extended periods, their family’s income is at risk.

The informal economy is not a relic of the past or a sign of backwardness. It is also not a consequence of the failure of modernization strategies. Today’s informal economy is an essential feature of global production networks. It operates in an environment marked by complex formal and informal economic links, global economic cycles, and domestic economic concerns.

For many in the informal economy, savings are either nonexistent or extremely limited. Typically, they lack employment security, healthcare benefits, sick leave, pensions, and severance packages. Only some of these low-income households are beneficiaries of social transfer programs or other formal insurance arrangements. And here also coverage and adequacy of benefits remain an issue. In short, informal workers earn their living without a safety net.

Without these protections, informal economy workers, especially the poor, face a wide range of occupational, safety, and health risks. They are disproportionally affected by natural hazards and human-made disasters. When affected, the poor tend to lose a larger fraction of their wealth, given their lower ability to cope and recover from disaster impacts. 

Even those whose employment is technically on the books, such as Uber drivers, face a raft of disadvantages. Being classified as independent contractors, many struggle to win unemployment benefits because their employers fail to pay insurance premiums or report wage data to state agencies.

Today, many at-risk informal workers are classified as “essential” to keep the economy going during the pandemic even though they lack basic labor protections.

The private insurance sector should see this as an opportunity to contribute to societal development by designing and offering fit-for-purpose healthcare provision, pensions, and insurance solutions for the missing middle. 

The extension of social protection or insurance to workers in the informal economy often concerns households already relying on informal support and risk-sharing. Insurers should gain insights from the interactions between pre-existing informal risk-sharing networks, social protection schemes, and formal insurance markets while designing new solutions. The design elements must reinforce rather than undermine the positive aspects of informal support mechanisms in risk management. 

Often the potential to build on community-based insurance like cooperatives and mutuals is overlooked. A thorough understanding of these mechanisms can help create positive synergies to manage the idiosyncratic risks. For covariate risks, financing the extension of risk protection needs to be done via risk transfer. 

Microinsurance provides a credible option to balance equity and sustainability. Post-disaster, microinsurance products can cover the cost of health care, deaths, and burials, loss of livestock or crops, or business assets. They can also support the business or income-generating enterprises while the overall system recovers. 

However, limited access to a range of risk management mechanisms and data prevents insurers from offering access to affordable insurance. A case in point is the challenge of developing business interruption products post-pandemic due to a lack of legal documents, proof of inventory and income, and insurance providers’ misperceptions about the client group. 

Today, many at-risk informal workers are classified as “essential” to keep the economy going during the pandemic even though they lack basic labor protections.

The COVID-19 outbreak and accompanying disasters due to natural hazards have exposed the challenges in protecting informal workers and vulnerable households in Asia.

In the new normal:

Mutuals and community-based insurance need strengthening through regulatory and supervisory oversight as they play a critical role in insuring the missing middle. In doing so, the women’s position as the households’ risk manager can be reinforced further and recognized at the community level. 
Governments should consider linking social protection programs with insurance to provide a safety net response. The use of digital technologies to target social protection programs towards households most at risk and targeting the female heads of families would be necessary. 
Subsidies do not automatically lead to high take-up, although evidence suggests that they expand coverage in different contexts. The role of smart subsidies needs to be further explored. And the same goes for smart technology.
The viability of insurance is a direct function of an insurer’s solvency of following a large-scale catastrophe or sequential disaster events. Well capitalized and regulated insurers can diversify their portfolios via reinsurance and help in growing this nascent market.
The design elements of new insurance products need to address the informal sector’s risks and the gig economy workers. They must also consider access to existing risk-pooling arrangements to offer optimal protection.
There is little awareness or understanding of the merits of insurance for managing large-scale disasters. More awareness-building is needed to instill trust and to involve women as change agents. Home is the best school, and the mother is the best teacher. In this manner, one can instill the value of insurance in an entire generation. At the same time, stringent action should be taken against those who are mis selling. 

To address the future of work, a shift in thinking is needed about private partnerships and putting the elderly, women, and youth at the center of loss prevention and building resilience for the households. This will be the most effective way forward for developing future protection solutions.

covid, covid-19, coronavirus, novel coronavirus, corona virus, covid-19 response, communicable diseases, infectious diseases, emergency response, health response, outbreak, pandemic, covid-19 prevention, insurance, informal workers, informal labor, social protections, health insurance, vendors, day laborers, contract workersArup Kumar ChatterjeeArticle

Original Source: blogs.adb.org

Rashmi Verma, Executive Director and Co-founder of MapmyIndia, had one thing in mind when she returned to India from the US in 1990 – build something lasting and powerful. 

A graduate in Chemical Engineering from IIT Roorkee with a master’s in Operational Research and Computer Science from Eastern Washington University, Rashmi worked for the likes of Citi Corp before joining IBM in the US. She then returned to India with her husband and realised India did not have a map reading culture like the US. 

With the firm belief that India has a huge market for digital maps, Rashmi co-founded MapmyIndia in 1995 along with her husband, Rakesh Verma. The Delhi-based company offers digital map data, telematics, and location-based SaaS and GIS services, and is now making waves with its app, Move. 

From building GIS mapping tech for Coca Cola to offering solutions to customers in industries such as automobile, ecommerce, banking and insurance, spacetech, and more, today MapmyIndia’s in-built digital map solutions are used by auto companies like Tata Motors, Hyundai, Mahindra & Mahindra, BMW, Ford, Jaguar, TVS Motors, and others. The maps also power Flipkart, Amazon, and Ola Cabs.

With over three decades of experience in technology, Rashmi, who always believed technology has the power to bring quick and fast solutions, is now focusing on the broader strategic tech roadmaps and plans for MapmyIndia. 

The MapmyIndia Move app was also awarded the Aatmanirbhar Bharat App Innovation Challenge for its unique indigenous solution for ensuring hyperlocal discovery.

Techie Tuesday- Rashmi Verma

Rashmi Verma at an event in 2017

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Engineering and coding 

Rashmi’s father was a doctor, who worked for the Northeastern railways, and her mother was a homemaker. She spent most of her childhood in different parts of North India like Gorakhpur, Bareilly, and Banaras (Varanasi). 

Rashmi describes herself as an academically inclined child and wanted to do medicine like her father. As it meant a lot of studying, she chose to do engineering from the University of Roorkee (now IIT Roorkee). 

“I didn’t appear for many entrance exams and directly joined University of Roorkee. I was one of the nine girls who took up the Chemical Engineering course in 1973,” says Rashmi. 

She says in those days there wasn’t much information of what electives to take, but in retrospect she feels she chose the best one. “It gave me a strong base on the fundamentals of engineering and also helped me in the future, and it made it easier for me to understand and learn different things and new concepts,” says Rashmi. 

Rashmi got married during her third year of engineering, in 1976, and a year after her graduation she went to the US with her husband and pursued her master’s in Operational Research and Computer Science from Eastern Washington University. 

She defines the course as the precursor to big data and data science. It was here that she learnt all about analytics, coding, and programming. After completing her master’s in 1979, Rashmi joined Citi Corp where she worked on building and handling the information technology for banks. 

“I learnt all about banking technologies, and it was my first foray into building banking solutions, working on programming and coding,” adds Rashmi. Techie Tuesday - Rashmi Verma

Rashmi at Eastern University Washington in 1979

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A mix of hardware and software 

After her stint at the Citi Corp in the early 80s, Rashmi joined Scowell systems that worked on technology for home appliances. She explains that working at these firms gave her a detailed understanding of both the software and the manufacturing aspects of technology.

“It gave me an understanding of coding and programming across different sectors, and the impact and power of technology in each of the spaces,” explains Rashmi. 

But according to her, it was only after joining IBM in 1984 that her horizons expanded. At that point in time, IBM had 600 people, and it was the beginning of an era where computer science professionals were hired as project consultants.

She says, “Not only was I travelling around the country training different software professionals, I was also working on billable projects going to different customers, building the core technology for different parts of the business with IBM Mainframe. I realised that I am a detail oriented person, and programming and building different mainframe products and projects gave me the much needed push.” 

“One thing about technology is that you have the ability to find solutions for different kinds of problems. It is always zero to one,” she adds. Techie Tuesday - Rashmi Verma

Rashmi Verma with the IBM team in 1984

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India calling 

After working at IBM in the US for six years, Rashmi realised she wanted to come back home and use technology to solve real problems. She returned to India along with her family in 1990 and continued to work in IBM Mainframe technologies. 

Rashmi explains, “We had our family here, and while that was one strong driving force, another strong force was the work we could do. We knew that technology had the power to transform lives, and we wanted to make that difference to the everyday lives of people in India.” 

“We started doing projects for Tata Steel and we had also built a pool of people who could work on these projects. I continued to shuttle between India and the US, but then realised I didn’t want to lead that kind of life. What was the point of coming back to India if I was working on projects in the US, and my two children were here and I wanted to spend time with them,” says Rashmi. 

Until then India did not have digital maps used by the general population. Most of the maps used satellite images and were built for government or military purposes. The maps, as we see it today, were built later manually by gathering data and information. 

When the husband-wife duo decided to focus on India specific problems, they knew mapping was one area that will help solve several logistics challenges. But purely working on IBM mainframe systems didn’t help. It was then they realised they needed to work on smaller DC systems, and one core problem that stood out was the lack of any digital maps. People just weren’t using any map-based technologies in India. 

“That was the beginning because without the map we can’t solve any problem even if we have all the technologies like GIS software,” explains Rashmi.

Techie Tuesday-  Rashmi Verma

Rashmi during her IIT Roorkee days

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Mapping India 

The Indian economy was opening up in the 90s, and companies like Coca Cola were looking closely at the Indian market. 

“They needed maps, and we scrambled to build something to give them an early solution,” says Rashmi. She says they built a high-level map with the district boundaries to help with the distribution network. 

However, the company needed a solution for cities where the trucks would ply and sell Coca Cola bottles to every outlet. This meant building streetwise maps with the outlets. 

“This wasn’t just a digital map. We built a solution using GIS mapping technology. We worked for the likes Motorola, Modi Xerox, and a few others,” adds Rashmi. 

While there was no GPS, Rashmi says she leveraged the telecom revolution to help build solution for telecom companies. This was for their towers, where they wanted to know the maximum amount of technology they needed to deploy. 

“We built the triangulation services on our maps to help them with the best areas and what technology they could deploy, which also helped us scale our maps,” says Rashmi. It also gave them an idea of demography and signal strengths in each areas. 

Techie Tuesday- Rashmi Verma

Rashmi being felicitated at an event in 2018

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A deeper understanding 

Rashmi says the pace of technology is faster now. Earlier, they had to painstakingly collect data manually. “Now we have real-time data gathering, map building, and machine learning that makes it easier to understand the changes,” she explains.

Today, MapmyIndia’s product – Move – offers a detailed house number-level map search, compatibility with India’s own satellite imagery service from ISRO’s Bhuvan, real-time traffic and safety-based navigation, and more.

The company has grown with location technology, specifically in the areas of navigation, tracking, IoT, and analytics to provide products, services, and solutions to over 10 million end users – consumers, enterprises, and governments.

Advising techies Rashmi says, “My advice to techies is that whatever area you pick, ensure that you deep dive into it. I believe there are now two kinds of techies – one is the techie who goes into the bits and bytes and rebuilds deep tech. Another type of techie is one who goes to the business side of things and understand the plethora of things that helps give them a broader overview of what solution can be built. If you happen to be the first kind, I would advise you to dive extremely deep.” 

Edited by Megha Reddy

Original Source: yourstory.com

Starting a new business is a busy time for an entrepreneur. You’re developing a business plan, getting your financial plan in order, and possibly pitching to investors or seeking funding. One thing that can be overlooked but is incredibly vital, is ensuring all legal obligations are met. The failure to do so can result in fines or possibly even court proceedings.

This guide should help you tackle the legal aspects of starting a business in the UK, from choosing a name for your business right at the start all the way to employing staff later on. You can work the relevant legal points into your traditional business plan, or even draw up a separate legal plan or checklist to ensure you have covered everything. 

While the legal processes covered are specific to the UK, the general categories are likely applicable no matter where your business located. That being said, let’s dive in.

Naming your business

You need to choose a unique name for your business, that is not being used already, to avoid running

into problems. If the name is too similar to other businesses, it can suggest there is a connection between the companies and you could be seen as trying to pass your company off as theirs, taking business from them as a result. If they complain or file for trademark infringement, you could be required to change your business name, possibly pay damages, and spend extra time and money re-doing signs, stationery, advertising, etc.

You can easily check to see if your name idea has been taken yet using Made Simple and it’s also wise to verify if a similar trademark already exists.

Choosing the legal status of your business

The legal status you choose determines whether you need to register your business with Companies House, which is the UK’s registrar of companies. The legal status also affects the records and accounts that you have to keep, the amount of tax and National Insurance (NI) you will pay, and your financial liability if the business were to go under. 

It’s also worth noting that in the UK employees pay NI contributions to qualify for certain state benefits and a state pension when they retire. This total will vary based on the legal status of your business. Here are the most common types of legal business structures to choose from when setting up a new business.

Sole trader 

This is the easiest option if you are the only owner (you can still employ people). There is no business registration with Companies House required and keeping records and accounts is simple. Many businesses start off as sole traders and change their legal status later on.

You can benefit from full profit retention and you can complete your own self-assessment tax return online each year, or get an accountant to do it for you. There will be more about paying taxes in the next section. 

If you want to protect the name of your business, you will still need a trademark as no formal registration happens. You will need to weigh up the cost of this to see if it is worth doing.

The downside of being a sole trader is that you have unlimited liability, meaning you are liable for any debts the business has. You could risk your own personal assets, such as your house and savings if the business got into financial difficulty. Sole traders also find it harder to get the funding they need from banks, but it could be the right option for you if your business is low-risk and does not need finance. 

Some people prefer to deal with sole traders over limited companies as the business tends to feel more personal, particularly if the nature of the work is sensitive.

Partnership 

This is the easiest option when there is more than one business owner, and two or more people share the costs, risks, and responsibilities. You do not have to have equal shares and each person’s liability is proportionate to their share.

The downside is that like being a sole trader, partners are not protected financially. If the business goes under you could become liable for your partner’s share of the debt. To avoid this scenario, you can become a Limited Liability Partnership (LLP) so that the LLP is then responsible for any debt and not the business owners.

Limited company 

Most limited companies in the UK are limited by shares. Setting the business up as a limited company means it is a separate legal entity that protects you financially, as the company finances are separate from your own personal finances.

It is more complicated than becoming a sole trader as you need to register the business with Companies House, submit accounts and annual returns to them, and adhere to their record-keeping requirements.

There can be financial advantages in terms of paying tax by becoming a limited company, and it can also be easier to obtain financing. It is best to discuss these specific benefits with an accountant before registering your business.

Paying tax and National Insurance

All businesses must be registered with HM Revenue and Customs (HMRC) as soon as you start trading so that you can pay income tax on your profit and Class 2 and 4 national insurance (NI).

This can be done online and the HMRC will set up an account for you to do your self-assessment. Once complete, they will contact you with a ten-digit Unique Taxpayer Reference (UTR) and send a letter in 2-3 weeks giving you an activation code to access the account.

In order to complete your self-assessment properly, you will need to keep records of your business sales and expenses. To help me stay organized, I have a separate business account that I use to buy the things I need for business operations.

Accepting payment by cash makes keeping track of earnings a bit trickier, and may require keeping and uploading receipts. You can also manage this with your accounting software and add the information to your business financial statements on a monthly basis.

If you are moving to the UK to start a business, you will need to apply for an NI number and can give this number a ring to apply: 0800-141-2075.

Value Added Tax (VAT)

Value Added Tax (VAT) is a tax added to most goods and services. You only need to register for VAT if your VAT taxable turnover is going to exceed the current limit in any rolling 12-month period. The limit is currently is £85,000, and you do not need to include any values from sales that are VAT exempt.

For example, VAT is not added to most food and children’s clothes. Additionally, a lower rate of 5% applies to certain goods and services such as home energy and children’s car seats. The standard VAT rate is 20%.

If you need to register for VAT, there is further information available via www.gov.uk/vat-registration.

Insurance

Some insurance policies are legally required, whereas others are available if you want to protect your business against certain risks. Parts of the business that you can insure include your vehicle, equipment, premises, employees, your products and services, your business idea, and even yourself.

Motor insurance 

Insuring vehicles is always required by law. If you are going to be using your vehicle for work, you will need to make sure you have insured the vehicle for the correct class of use. Any claims would be rejected if you use the vehicle for business purposes without amending your policy to reflect this.

There are other motor insurances available to cover things like tools in a van, that would require Goods in Transit cover. You can compare the costs of these policies via www.confused.com/van-insurance/goods-in-transit.

Professional indemnity 

This insurance is required for certain professions such as accountants and financial advisors. This protects them against claims for losses suffered by customers as a result of mistakes or negligence. Often other professional advisors decide to take this cover out for their own peace of mind in case their customers want to sue them.

Employer’s Liability Insurance

This is mandatory for all businesses with employees. This is to protect you from any claims an employee could make following an accident or illness suffered as a result of working for you.

Additional insurance coverage to consider

Here are some other insurance policies you may want to explore depending on the nature of your business:

Buildings and contentsBusiness Interruption —These policies typically cover any instance where you are unable to operate due to external factors such as inclement weather. The extent of policy coverage fully depends on limitations laid out in your insurance contract. Cyber cover — If you have access to information that would be valuable to fraudsters, this will help manage the cost of the incident and deal with enforcement against you from industry regulators.Employment ProtectionKeyman insuranceMoney in transitProduct LiabilityPublic LiabilityShop insuranceTheft

It is worth remembering that all business insurances are tax-deductible expenses.

As there are so many insurances to think about, it is helpful to go and speak to a local insurance broker to check you have the cover you need. The Association of British Insurers (ABI) website contains a section to help you choose the right insurance for your business.

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Acquire industry-specific licensing

Certain businesses require a license from the local authority to be allowed to trade legally. Some examples include hotels, hairdressers, street traders, boarding kennels, and food outlets.

Contact your local authority and ask to speak to Local Planning or the Building Control Office to find out if you need to register or obtain a license, as failure to do so may qualify as a criminal offense.

Local authorities also have Trading Standards departments who help you understand how to be legally compliant in your business area. You will need to know who the regulator of your industry is and then find a way to keep your knowledge up to date to remain compliant.

Do I need planning permission?

While you investigate whether there is a need for a license from the local authority, also ask them if you need planning permission. Working from home or changing the use of a building can both require planning consent, even if you are not changing the physical building.

You can be fined if you set up a business at home without permission. If your work leads to extra foot traffic and a lack of parking, excess noise, etc. your neighbors may end up reporting you.

Ask the Local Planning or Building Control Office about the plans for your business as soon as you can. Planning consent can take time if it is needed and may cost some money, so it is good to have this figured out early on. 

Employing staff

If you’re going to take on staff you will need to ensure that you comply with certain pieces of employment legislation. Here’s what you need to establish.

Carry out applicant checks 

As an employer, it’s your legal responsibility to make sure you check that any staff has the right to work in the UK. Depending on which sector you work in you may also need to undertake a criminal records check known as a DBS check. Failure to do so can lead to you and your business being liable for a civil penalty.

Register with the HMRC as an employer 

You usually need to register with HMRC within 4-weeks of taking on your first employee. You’ll be responsible for deducting any tax and National Insurance contributions from your staff’s pay. You’ll also be responsible for paying any remaining employee or business taxes at the end of the year if you do not plan accordingly.

National minimum wage 

You must make sure that all staff is paid at least the current national minimum wage per hour for all the hours that they work. The rate does depend on each employees’ age and if they’re an acting apprentice.

Pensions auto-enrolment 

As an employer, you must enroll all eligible staff into a workplace pension scheme. There are different pension types that either require you or the government to add a specific matching dollar value to each employee pension. In most automatic enrollment schemes, employees will make contributions based on total earnings, including:

salary or wagesbonuses and commissionovertimestatutory sick paystatutory maternity, paternity, or adoption pay

Statement of employment 

You will need to issue all staff, who will be with you for more than a month, with a written statement of employment. This document sets out the conditions of their employment, such as hours and pay, and must be given to staff within 8-weeks of their start date. In addition, staff should be given a contract (which can be incorporated with the statement of employment).

The contract sets out details of their rights, responsibilities, and working conditions. Make sure the contract is clear on which terms are contractual and which are not, as this will affect how you can make any changes in the future.

Employers liability insurance 

We mentioned this before, but if you employ staff other than direct family members then you need to take out employers liability insurance. This type of insurance will cover will protect you from claims made by employees if they are injured or fall ill at the workplace.

Health and safety 

All employers are required to provide a safe working environment for their staff. If you have more than 5 staff you will need to have a formal written Health & Safety policy. This includes a safe place to work, safe access to work, safe systems of work, safe equipment procedures, safe interactions between workers, and protection from risks of injury.

Legislation that may affect your business

Legislations are rules and regulations that you must adhere to whilst running your business. I have not listed all of them as not all will apply to every business, but you will need to identify the ones that apply to you. We will touch on the more common ones, but to explore more legislation please visit www.legislation.gov.uk.

Employment law

Employment law is there to protect the rights of employees and their health and safety. We will touch on the main laws to consider for those employing staff.

Health and Safety at Work Act of 1974

Premises and machinery must be safe and not affect the health of workers. If you employ 5 or more staff you need to have a written health and safety policy and conduct risk assessments which need to be documented and communicated to the employees.

Equal Pay Act of 1970 

Employees must be paid equally to those who do work of the same value regardless of their sex.

Sex Discrimination Act of 1975 

Employees cannot be discriminated at any stage of recruitment, training, or employment.

Race Relations Act of 1976

It is illegal to discriminate against a person because of their color, race, or ethnic group.

Employment Protection Act of 1978

Employers must provide employees with a written contract of employment. This is to protect them from unfair dismissal and gives them the right to redundancy pay should their job no longer be required after 2-years.

Consumer Protection

Consumer Protection rights are there to protect customers from unfair business practices.

Sale and Supply of Goods Act 

Goods must be of a decent standard. This applies to any goods that are identified and agreed to be purchased by consumers.

Trade Descriptions Act 

Goods and services must be as advertised and you must not give misleading information.

Distance Selling Act 

Some selling methods, such as online shopping, require you to allow a ‘cooling-off’ period, during which time a customer can change their mind about a purchase and obtain a refund. 

Data Protection Act/GDPR

This will apply to anyone that needs to take any customer details, so it will apply to the majority of businesses. You’ll want to make sure you fully understand the extent of these protections and can check the Information Commissioner’s Office for specifics.

Develop internal legal documents

Developing internal legal documents helps to instill confidence in your business for the benefit of everyone — your customers, employees, and potential investors.

Privacy policy

A privacy policy is a statement that tells your customers how their data will be collected, used, stored, and protected. It should also detail if there may be a need to share any personal information.

Company handbook

Your company handbook is something you will probably change and add to as your business grows. In short, it is really a book to summarise how you do things in your business. It needs to be made available to staff at all times — you could either give everyone a copy or make it otherwise easily available for reference. Here’s what to include.

Your company mission statement

Your employees want to know the goals and reasons for your company’s existence. This is where your mission statement comes into play. Generally, it should include the history of your company, the vision, and the goals you want to achieve.

Your company’s policies 

Your company policies are typically extensions of required legal stipulations along with any additional company-specific policies. This can be anything that is important such as having a clear desk policy outside of office hours to help protect data or even just the way you want staff to answer the phone.

Human resources and legal information related to employment

If you don’t have an HR department to help you outline every policy, you’ll need to address the following:

Joining the company Employee benefitsWorking hours Annual Leave and sickness absenceAbsence management –policy for managing short and long-term absence and requirements for reportingBribery, confidentiality, whistleblowing, and data protectionEqual opportunities and bullying and harassment policiesIT rules (including areas such as social media use both inside and outside of work)Your Health and Safety policy including how you intend for you and your staff to implement this Disciplinary/Grievance proceduresFlexible family-friendly legislation policiesCapability and performance management targets and proceduresTermination of employment including retirement and redundancy

It is a good idea not to make any company policies contractual for staff so you can amend the staff policies in the employee handbook at any time.

Retaining legal counsel

It is useful to have a solicitor on retainer so that you can get advice whenever you need it. When starting and operating a small business you probably won’t need a solicitor often, but having phone support available for when you do will be beneficial.

There are large national organizations that offer this service such as Peninsula Group Limited, but you may prefer to ask a local solicitor or a more friendly and personal service.

Why develop a legal action plan?

Incorporating a legal action plan into your larger business plan may be necessary when pitching to investors or applying for funding. It’s also valuable to incorporate specific legal steps into your milestones to better use as a management tool.

Now, this guide has covered a lot of different legal components, so you may find it easier to write a separate legal action plan. Since Employment Law is such a large part of legal planning, if you do not plan to hire any staff and will operate by yourself, you might just need a simple legal checklist.

In any case, be sure that you have some sort of plan in place to be sure you address everything.

Don’t get overwhelmed by legal requirements

This all may seem daunting as there is so much to think about, but I hope that this guide helps you to plan and meet your legal obligations. It is best to start off small but keep the big picture in mind. Keep referring back to your traditional business plan so as not to lose sight of what you dreamed of.

If you ever have questions or concerns about specific legal requirements, check the official UK government website or reach out directly to a legal expert for assistance. Best of luck with your new venture!

Editors’ Note: This article is purely informational and should not be taken as legal advice. If you have questions regarding specific laws, licensing or protections contact your preferred legal counsel. 

Original Source: articles.bplans.com

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