1. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection This presentation is written for you as a professional financial adviser. Please do not show this to your customers. AXA Business Protection Types of Businesses and their Needs

2. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Topics to cover… Sole Trader Partnership Limited Company Quoted Limited Company

3. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Tax We offer some information about tax within this presentation. This information is based on our understanding of current UK Tax legislation. Tax rules are subject to change and their value depends on the customers circumstances.

4. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Sole Traders Occupied in pursuit of profit through trade, profession or vocation Turnover (financial measure of gross outputs) can relate to goods supplied, time charged and/or work completed. Expenses are those costs incurred in achieving turnover The difference is net profit (or loss)

5. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Sole Traders Net profit is taxable each tax year Losses are carried forward or set against other income (or carried back in certain circumstances) In calculating taxable profit or loss, adjustments are made to accounts profit in accordance with Revenue legislation Taxable Profits are charged to Income Tax ( there are separate rules covering Capital gains) Capital involved in business represented by information in balance sheet.

6. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Sole Traders Protection Needs… Personal Life/Critical Illness Income Protection (Health) Loan Protection Key person for employee's? IHT mitigation, Pension etc

7. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Partnerships More than one person sharing a business venture Governed by an agreement between them Joint and several Only able to contract as individual(s) “on behalf of business” Principles of Sole Trader accounting followed but with Profit /Capital split in accordance with partnership agreement

8. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Partnerships Each partner responsible for submission of their profit share to HMRC but often dealt with by Partnership Secretary Same calculations as for sole trader but with added requirement to account fully for capital shares Each partner will have capital in business

9. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Partnership Protection Needs… Each partner needs personal life and critical illness cover Each partner needs income protection Each partner needs loan protection The business needs: Key man protection Loan protection for business loans Capital protection based on each partners share of value in the business

10. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Limited Liability Partnerships Growing trend Same as standard partnership with : Joint and several liability restricted to their subscribed capital Partnership is legal entity so can contract in the name of the partnership Partnership registered with Companies House and returns need to be made Some measure of creditor protection stipulated

11. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Limited Liability Partnership Protection Needs… The partners of the company would want to : Protect their share of the business by ensuring that profit is not impacted by the death or critical illness of key employees Assurance that in the event of a partner suffering death or critical illness funds are available for the surviving partners to purchase the deceased’s share from their estate Any borrowings are protected if their repayment is dependent on key employee performance

12. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Small Limited Companies Bound by Memorandum and Articles of Association Registered at Companies House Returns have to be made to Companies House Employees are salaried Shareholders own the business and potentially receive dividends Company has a legal identity and can contract

13. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Small Limited Companies Protection Needs… The shareholders of the company would want to : Protect shareholder value by ensuring that profit is not impacted by the death or critical illness of key employees Assurance that in the event of a shareholder suffering death or critical illness funds are available for the surviving shareholders to purchase the deceased’s shareholding from the estate Any borrowings are protected if their repayment is dependent on key employee performance

14. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Quoted Limited Companies Larger businesses Broader shareholder base Audits required Deeper return obligations ( Companies House and Stock Exchange) Employees are salaried Shareholders own the business and potentially receive dividends

15. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Quoted Limited Companies Protection Needs… Protection in the event of a member of senior management suffering death or critical illness Protecting profit in the event of the death or critical illness of key employees Protection against any adverse consequence of the death of a major shareholder

16. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Businesses Keeping Financial Records All businesses have to file tax returns with HMRC and some have to lodge financial information with Companies House Standard format : Profit and Loss Account Balance Sheet ( sometimes not required for a sole trader) Management Accounts Business Plans Project Plans These are varied dependent upon the type of business

17. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Accounting & Tax For income: Profit and Loss Account Records revenue matters ie. Gross Income less cost of sales = Gross Profit Reduced by expenses incurred in running the business= Net profit HMRC have their own rules regarding expenses so the accounts lodged with HMRC will have an adjusted profit calculation. HMRC rule is that only expenses wholly and exclusively incurred ( in the achievement of profit) is allowable.

18. This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection AXA Business Protection Accounting & Tax For Capital: Balance Sheet This shows the position at a point in time of how the business is funded It indicates where money has come from and how it has been used. It reveals a value of assets ( but not necessarily market value) It is a snap-shot and as such is often positioned in best light!