Jeffrey Amit

Juan Miguel Baron

AMRON Parking Ltd.

I. Business
A. Brief description
The group has chosen to put up a multi-story car park along 69 Knightsbridge,
London City, United Kingdom. This would be a steel parking structure that would be
located in a prime location near Hyde Park, where there are still available spaces for
lease. The parking structure will be made out of steel to lower the costs, since there
would be less material and capital needed to construct this structure.

B. Why did you choose this line of business?

In the group’s opinion, this would be a good business opportunity since London is
known to have the most expensive parking in the world. Motorists pay an average of
£42 a day just to park their car within London. In Knightsbridge alone, Lee Boyce
stated in an online article that drivers pay up to £13,000 a year to use the luxury
parking service at Kingston house. With that said, it is clear that there are no
affordable parking spaces within London because parking spaces are very scarce.
Multi-level parking facilities are very rare in the City, which is why putting up a low-
cost one would be a very good opportunity.

This type of business is also a very practical business as there is minimal need
for maintenance. This means that there is little need for manpower (except during the
car park’s construction) and would only require minimal personnel. The construction
of the parking building if it were made out of steel would be around £40 - £55 per
square meter of parking area exclusive of labor. This would lower the cost of building
a traditional building as there is less materials needed. The implementation of this
business would be quick since there is no need for concrete, thus the building time
would be exponentially smaller. Advertising fees would include putting up fliers in
various restaurants along Knightsbridge and locations within a 2 kilometer radius, and
collaborations with stores and restaurants with limited parking. These can also include
partnerships with the different establishments near the area, to ensure that there will
be a steady flow of parking.
 The business will have 100 parking slots, and will charge a fixed rate of £30 to each
customer, regardless of hours spent, time of day, and day of the week. This is already
way less than the average parking price of £42 a day in London, but because of the
volume of cars the parking can hold, it is feasible.

II. Starting Your Business

A. Allocation of investments (Where/How much/Why) - £220,000 Investment
The first area that the investments will be allocated in would be rent. This would
make up most of the capital mainly because it would be a constant cost of the
business. Upon inquiring for the rent of the space within Knightsbridge, it would
amount to approximately £10,000 a month. The lease is inclusive of the 500 sqm land
area.

Another important cost is the expense of the entire structure. The group
consulted with Ron Ong, owner of 1067 Construction a contracting firm in the
Philippines, to have a proper quote of the building. He had prior experience with
construction in the United Kingdom as he worked here for a few years. He suggested
that we construct our parking space using a steel-structure. This was because it would
be far cheaper and faster to construct than of a cemented building. Also, the steel-
structure can be fabricated, which means the construction would be very easy. This
will result to the minimal labor costs needed. He gave us an initial quote of £150 per
sqm inclusive of both the steel fabrication and labor. Using 500 sqm space for the
parking area, it would amount to £75,000 per floor. Having two floors, the entire cost
of the structure is estimated at £150,000. Mr. Ong said that this number is just based
on his initial quote, the price would likely become cheaper once we tap the supplier of
the steel fabrication.

The next expense would be the salaries. Aside from it being expensive, this is
liable for your employees and their livelihood. Since we are the ones that provide
their income we should be sensitive to their own personal needs and follow the
government mandated salaries. However, only 3 personnel is needed, each having an
8 hour shift. The minimum wage in London is £10.2, which means salaries for a day
would reach up to £250.
 Utilities would make up only 5% of the total capital of the business. The
reason for this being relatively low is that the cost of utilities is also relatively low. In
reality, the group sees that the only utility cost needed would be for electricity. It
would take minimal capital to pay for the bills relative to the revenue that we would
receive in return.

To ensure that the structure is up to standards, monthly maintenance is needed.

Since the structure is just steel based, there will only be minimal maintenance cost.
5% will be allocated to this expense per month.

For the first quarter of the business, advertising expense would be needed to
be shouldered. This is because the business needs to promote their service in the
London Market. Only 3% will be allocated for this cost because advertisements using
social media would more or less be cheap. Another factor would be using the space of
the parking to put up tarpaulins outside that does not cost that much.

Another expense would be the miscellaneous fees. Just like any business, we
need to be prepared for whatever scenario and we need to have funds necessary for it.
7% will be allocated to this cost to make sure the business has sufficient funds when it
is needed.

The insurance expense is another vital cost that needs to be shouldered. The
group consulted with Bing Mangabat of MAPFRE Insurance Philippines, who is an
expert of International Insurance. Based on his findings, he said the only insurance
our business needs is Fire Insurance. This insurance type is already inclusive of the
‘Acts of God’ (typhoons, earthquakes, etc). He initially quoted our insurance would
cost at £500 per year. He said that since our parking space does not offer valet
parking, there is no need for Accident Insurance since there won’t be any necessary
damages done.

With all that said, it is estimated that the initial investment would be £220,000,
keeping in mind that construction will only be less than 2 months.
 Amron Parking Ltd is a private limited company, which means that it is a
separate entity from the people who run it. The assets of the company are different
from the personal assets of its shareholders, and that it may keep its profits after
paying its tax dues.1 The liability of the members is limited to the amount unpaid, if
any, on the shares held by them. In unfortunate circumstances, creditors cannot make
any claims against the personal assets of both the directors and the shareholders.

In order to comply with the registration requirements of the Companies House

the following will be given:

The company name is Amron Parking Ltd, which is currently available

because it does not belong to any company listed on the Companies House. The
company’s office will be located at 69 Knightsbridge, London City, United Kingdom,
which is the same location as where the multi-level parking lot is built. There will be
two directors. One is Juan Miguel Baron, and the other one is Jeffrey Amit, who will
also be acting as the company secretary. The management of the business is the
responsibility of the mentioned directors, which enables them to exercise all the
powers of the company. The company has a share capital of £ 220,000, which will be
divided by 5,000 shares; therefore, it will be priced at £44 each. At the initial Juan
Miguel and Jeffrey will hold 2,500 shares each. Future shareholders will only get a
voting right if their shares are equal or more than 10% of the company. The
shareholders may have the power, by any special resolution, to influence the actions
taken by the directors. But do take note that special resolutions cannot invalidate the
actions of the directors prior the passing of that resolution.

The UK Standard Industrial Classification code is 68201 under the Renting

2
and operating of real estate class. The supporting documentation is taken from the
official website of the Companies House.

1
“Advantages and Disadvantages of a Limited Company”, The Company Warehouse, last modified February 3,
2010, https://www.thecompanywarehouse.co.uk/blog/advantages-and-disadvantages-of-a-limited-company
2
“Set up a private limited company”, Gov.uk, accessed on December 1, 2017, https://www.gov.uk/limited-
company-formation
 The company will have a memorandum of association, which is signed by
both initial shareholders, and articles of association that contains the agreed bylaws of
the company.

Memorandum of Association

The business chose to be a private limited company to enjoy the privileges of

entering into contracts, own properties, and borrowing money, granting a floating
charge and commencing legal proceedings on its own rights, without risking the
personal assets of its shareholders. Although there are complex and restrictive rules in
regards with the accounts of a private limited company, and restrictive capital raising,
we still believe that the pros of having a private limited company outweigh the cons

LTD VS. SOLE PROPRIETORSHIP AND PARTNERSHIP

Unlike sole proprietorship and partnerships, private limited company is

protected by law. Another advantage of being a private limited company over the two
that was previously mentioned is in taxation. Limited companies are only taxed based
on their profits which is at an average rate of 21%. This is much lower than the tax
rate imposed on sole proprietorship and partnerships, which, sometimes, can be up as
much as 40%.
LTD VS. LLP
The only reason why we chose LTD over LLP is because of the difference
when it comes to profit. Profit can’t be retained in the same way as a company with
limited by shares does. Profit in LLP is distributed with no flexibility to hold profit to
a future tax year

LTD VS. PLC

The business also chose to be a private company over public, because it
wanted to limit the number of external shareholders, to whom company directors will
be accountable for. Being public also means greater public scrutiny of the company’s
financial performance and actions.
Bibliography:
“Advantages and Disadvantages of a Limited Company.” The Company Warehouse. last
modified February 3, 2010.https://www.thecompanywarehouse.co.uk/blog
/advantages-and-disadvantages-of-a-limited-company

“Set up a private limited company”. GOV.UK. accessed on December 1, 2017.

https://www.gov.uk/limited-company-formation