Scenario
Homer and his best friend Flanders have decided to set up a business importing first aid kits from a well-known manufacturer in the USA. To finance the business, they will each put in £75,000 from their savings. They intend to start trading from 1st July 2022. Homer has already spoken to a bank who has agreed to provide an overdraft facility of up to £60,000 to cover short-term cash shortages during the first year. Any overdrawn balance at the end of any month will incur interest at 1.5% per month in that month by the bank.
Homer & Flanders are unsure as to whether the business should be in the form of a partnership or a limited company.
