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Comment by KaiserPro | Hacker News Reader

The only data I can get is this: https://www.kauffman.org/what-we-do/research/2009/04/educati...

93% had a degree, with 30% having a masters, That would suggest to me that you'd need a decent wedge of cash.

Now, what is interesting, is that in 2016 at least, the US created gross 960k new companies (there is some smoothing here, so +- 100k) The UK created 460k. Seeing as how the UK is 60 million, versus 300 million people, either the US is under performing, or the UK is wildly over performing. (https://www.sba.gov/sites/default/files/advocacy/2018-Small-... and https://researchbriefings.files.parliament.uk/documents/SN06... for stats)

Perhaps, as we don't have to worry about healthcare or no competes, that might be a factor.

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Registering a company in the UK, and keeping it running, is both simpler and cheaper than in the US.

Registering a company takes a few minutes and costs less than $30. Compulsory annual filing costs less than $20. If your company's revenue is below some threshold, you don't need to register for VAT (similar to sales tax). And there's another (even higher) threshold below which you can file very simple annual accounts (unaudited, and including neither income statements nor cash flow).

Agreed, I founded a UK company on a whim one day so I can bill for some freelancing work. It made a few thousand a year and everything was hassle-free, basically "pay $50/yr and file some stuff that tells us you're active, and when you get large enough to afford a good accountant they'll take care of it".

Based on those differences I'd wager that a lot more people in the UK would register their side gigs whereas in the US the trade-offs are rarely worth it unless you intend to make it a "legitimate business" at some point.

Eh, in my state in the US it is like $85 every 2 years for a LLC and essentially no paperwork if a simple pass-thru. Not everyone needs a Delaware C-Corp from day 1.

Nice. That's a lot simpler than CA. Here there's paperwork, more complicated taxes and $800/yr for a single-member LLC.

That's about the process in Texas. Incorporating is a different story, but you don't have to incorporate to register a business (and it's probably a waste of money if you are the sole owner with no employees).

Does the simpler option provide limited liability?

The UK also makes company formation very easy and still slightly advantageous for sole traders, which may be a factor. I did check the criteria and they do include "must be listed for VAT or PAYE", so they're all real businesses to some extent and not just shells.

The US would do well to look at its business licensing requirements to see if they could be simplified in terms of paperwork.

It's also cheap and trivial to form a UK company with bank account - no matter whether UK citizen/resident or not.

Filing for a company was trivial when I did it, but not many banks would give it an account (NatWest/Barclays/etc wouldn't). Has this changed?

There are quite a few non-legacy bank accounts that you can apply for a company account with in a very painless manner. Monzo, Starling and Tide spring to mind. I use Monzo as part of their business banking trial, but I previously have used Tide and (unfortunately) RBS.

Most company formation agents offer a free "bank introduction service". I have no idea how the logistics work, but I was able to open an account with Santander in a matter of minutes.

The smaller businesses can file with a flat-rate VAT (not itemized) which often means 5-10% tax benefit.

The UK also has universal free healthcare for residents, so no need for private insurance when you leave an employer and set-up on your own.

Interestingly, only a quarter of the businesses are employers in UK, so most of the company creation is presumably basically city of London financial engineering :-)

what's with justifying an existence of a company by having employees? If a company is profitable and you as an owner are doing well financially, does it really matter?

I believe the general thought is that at a very simple level, operating as a company provides for a number of protections for the owners/operators. At a societal level, the broad justification for allowing unnatural beings with those benefits is that it still provides a net benefit to society through things like employment opportunities, taxes and the encouragement of economic activity. If the concept of a company no longer provides any non-trivial benefit to society (for example, no jobs or taxes), why should society collectively provide laws that allow them in the first place?

Shell companies are not the same as a person working as a "one man band"

For example a company I worked for had a structure where the employees and customers (~250 employees and £50million turnover) were mostly interacting with the named company, but there were three other companies that "onion skinned" the company with the name.

This was done to manage debt, primarily, which then allowed manipulation of taxes.

For reasons outside my area of expertise, UK companies sometimes divide themselves into numerous sub-companies.

This produces the result that publicly traded company Tesco PLC has a great many sub-companies [1]. This is at odds with a lot of expectations about how companies are counted.

[1] https://beta.companieshouse.gov.uk/officers/uZl4-qVGUWaBK3Jd...

Tax is the usual one. That list also includes a lot of closed or dormant subsidiaries. Perhaps it's best to think of them as being like AWS VMs that get provisioned and de-provisioned, some with short lives. Tesco is complicated by takeovers that haven't been fully incorporated; I see a lot of familiar brand names in that list, and a whole other pile of fragments of Booker (giant wholesalers recently taken over)

I tried https://beta.companieshouse.gov.uk/company/07530494/filing-h... based on "EBT" in the name (tax shelter scheme), but it's a dormant empty shell.

TESCO GREY (2LP) LIMITED https://beta.companieshouse.gov.uk/company/FC027196 registered in the Cayman Islands? Obvious tax shelter of some sort. Also closed.

> For reasons outside my area of expertise, UK companies sometimes divide themselves into numerous sub-companies

One of the common reasons for subdividing firms (in general, not particularly the UK) is to take advantage of liability limitations, which work as well for corporation as shareholder as for natural persons as shareholders. If it is less onerous to set up firms in the UK, you'd expect UK firms to do more of this, because the cost/benefit analysis would favor more of the cost is lower.

Ah, yes, fortunately the source document where I got that stat from discounted all companies with no employees.

1) It's very easy for a sole trader or freelancer to incorporate. There's a slight tax advantage to drawing dividends from a limited company rather than paying yourself a salary, so a lot of these one-man-band companies technically have no employees.

2) A UK limited company is a flexible financial wrapper for all sorts of organisations, many of which aren't businesses in the traditional sense. A significant number of community groups are registered as limited companies rather than charities, even if they are run on an entirely voluntary basis.

3) The extreme convenience of the British system and relatively favourable tax rates mean that a lot of foreign companies choose to incorporate in the UK, even if they have no presence there. Until the introduction of the mini-GmbH in 2008, many German small businesses chose to incorporate in the UK, because dealing with the cross-border issues was easier than dealing with German bureaucracy. If I were a startup founder based in a developing or middle-income country, my first impulse would be to open a UK limited company - it takes about 20 minutes, costs about £20 and gives you a sound basis to operate as an international business.

4) The annual returns for a small limited company are so straightforward that it's often easier to keep a company dormant rather than formally wind it up.

The UK used to (?) be a haven for Ltd creation because of low costs, low bureaucracy and quick reactions. It's what lead to Germany's laws regarding UGs (Unternehmergesellschaft, literally entrepreneur company), much more comparable to the Ltd regarding easier access, much lower startup costs than the typical GmbH.

It will be interesting to see where these numbers move post-brexit.

Suggesting one variable explains such differences is incredibly reductive. Plus, The US is not a single country, there is federalism and you should treat all states differently since setting up a business in NY is supposedly a lot harder than in other states.

Indeed, and lots of companies have shells in Delaware. Because its lower taxes & "better" company law.

> Because its lower taxes

Lower taxes is irrelevant unless all your operations are in Delaware. It's a great trick for IP holding "companies" that are just a couple lawyers in Wilmington, but otherwise you are paying taxes to whatever states you actually generate revenue in anyway.

Why do you need "a decent wedge of cash" to have a degree?

There are plenty of universities that are affordable. For instance, City University of New York (CUNY) offers four year undergrad degrees for $6,730 a year [0]. You can get a room share in an outer borough for maybe 500 - 1.5k a month or Jersey for even less [1]. And this is one of the most expensive cities in the world. If you're smart, avoid unnecessary expenses, you can probably get by on 20k a year in expenses, which comes out to 26 hours a week at $15/hr, ignoring taxes. Taxes at about 15% at that low income means you'll probably want to earn closer to 25k to have 20k net which means 31 hours a week. But realistically you'll probably want to work full time or over time during the months school is not in session and closer to 20 hours a week at other times. Or try to find a job that pays more.

Don't know much about health insurance so that's also something you'll have to consider getting maybe through the school or some city program or just go without it.

Or just move to a more affordable city and probably cut everything above in half while hopefully only giving up a bit of the wage you'll earn

[0] https://www2.cuny.edu/financial-aid/tuition-and-college-cost...

[1] https://newyork.craigslist.org/d/rooms-shares/search/roo

So, working a four day week, and studying full time to do a degree. Yes, I can see that allowing lots of time to form a network and come up with business ideas.

I was replying to the specific claim that getting a degree requires a lot of money.

Undergrad programs are what, 3 to 4 years. That means enough money to replace 30 hour per week job for four years. With uncertain healthcare status. That is a lot of money. Over here studies are basically free, about 100 EUR incl. public transport per semester. And even then working full-time to be able to finance all of that is hard.

Health care is not needed. Undergrads are mostly young, and without kids. It is unusual for them to visit a doctor - maybe they get an infection, a $30 visit to a "minute clinic" and $20 in antibiotics, but that is a one time thing.

For the cheaper universities you can support yourself working 30 hours a week, if you make your degree a 5 year program you can cut your classes down enough that you can live on your income and have enough to pay for class. You don't get any "fun money", but all your time is focused on class so that won't matter. You are also living in the cheapest room you can find, and cooking your own meals of rice and beans (the cheapest food).

Maybe you don't want to live that way, but you could.

No health insurance? Sport accidents, serious illness, traffic accident, children,... Honestly, I still can't wrap my head around the fact someone would choose to live without coverage. That some are forced to in developed countries is shitty enough!

I didn't say it was the best idea, but the idea isn't unreasonable. Sports accidents are easy to prevent (don't play risky sports). I said no children as a prerequisite for good reason. While serious illness is possible, it is extremely rare in this age group. You can't afford to drive in my scenario, so traffic accidents are not a big worry.

I'd still want health insurance, but the odds are in your favor if you choose to not have it.

Not sure this is reasonable.

Young people are actually pretty sick which is understandable because time is needed to adapt immune system to external ambient. The lowest period of sickness must be between 30-50 yo (no data, just informed guess).

> Health care is not needed. Undergrads are mostly young, and without kids. It is unusual for them to visit a doctor.

Jesus Christ. Please don't take this as a personal attack but it boggles my mind that in 2019 this is a situation accepted as perfectly normal by a large number of people.

In many countries in the west, this is not even a question that arises. I assume you are based in the US?

That someone has to make a choice between potential financial ruin in case of an unforeseen illness or "saving" on insurance and staying solvent to pay for shelter and food in the most powerful country in the world beggars belief.

So what if I fall down some stairs and get multiple complicated fractures? I can just as well call it a day and shutter all my hopes for making it in life because the hospital bill will be punitive.

Sure, it's unlikely to happen, but the discussion here is about the fact that if a person has money (and insurance) then this would be "merely" a painful experience, whereas if they "saved" on insurance and paid for food, shelter and education instead then they are pretty much done for.

Last I checked, in the US you remained on your parent's heath insurance while in college (or until 25?). Its been that way for years.

It doesn't matter what country you live in, if you are between 15 and 30, and don't have kids: you are extremely unlikely to need a doctor at all. These are the healthiest years of your life.

That would be what I call a bet, a very risky one at that. Especially if you are not filthy rich already.

> Over here studies are basically free, about 100 EUR incl. public transport per semester. And even then working full-time to be able to finance all of that is hard.

Who needs to work full time to afford €200/year?

Housing, food, clothing, etc... Unfortunately that's not included :-)

So studies are tuition free. I suspect university costs are not being compared fairly then, because the loans people take out in the US generally cover most of that as well.

I did exactly this; went to Hunter College CUNY and paid my way through with a part time job. Mom and Dad payed all of freshman year tuition and I did live at home. End result: no student debt. But I still needed that safety net to make that possible.

> Why do you need "a decent wedge of cash" to have a degree?

I can’t shake the feeling, though, that after a certain point, in certain (important) circles, “affordable” degrees (like the one I have) are effectively the same as having no degree at all.

Why is that? Perhaps I don't operate in these supposedly important circles, but I have never found my affordable state degree to be a handicap in anything that mattered. Granted, that's because it's an engineering degree and, as my neighbor and fellow engineer once put it, after your first job people care more about what you've done than where you went to school.

I don't know what kind of life you've lived where you think $6,730 a year is affordable, but it's a lot. Most people I know would have greatly improved prospects if they had that much money to spare. Education would be low on the list. First would be fixing their failing cars/homes.

$560/month to spare would change my life. I already got a good STEM degree on Georgia's HOPE Scholarship (traditional job prospects wiped out by SaaS), so it would go to a good used car, a proper studio computer, and some clothes that aren't years old and falling apart. Plenty of people I know found themselves in debt with degrees no one would hire them for without experience. Not even stereotypically useless degrees. They were pushed into it by everyone they were supposed to be able to trust, sometimes even outright manipulated and lied to by family.

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