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As @doug and others said there is no problem creating a Relational Database in LO Base. The difference between a Flat File and Relational Database is the way data is organised in the Database - there is no requirement to have different hardware or use a server for a Relational Database.

A flat file database has one Table in which all the data is stored. It is the equivalent of the manual card index where each card has all the data about the Data Subject.

In a Relational Database there are two or more Tables with the data about the Data Subject split into different categories to be stored in the Tables.

Take an example of a Company that carries out repairs of customer units and where some customers regularly send in units. I a Flat File Database the detailed customer details would be repeated time and time again where the same customer is involved. This is will create an unnecessary large file. In a Relational Database for the same situation you could divide the data into two groupings, that about the unit and that about the customer. This data is in two Tables say Repairs an Customers. The Customer Table would have all the details about each Customer such as contact, company, address etc. and an unique reference number for each customer such as CustomerID. That can be created automatically with an auto-increment integer field and be the Primary Key for the Table. The Repair Table would have all the details about the unit and a CustomerID integer field. This would have the CustomerID contained in the Customer Table. So in effect all the Customer Details in the Repair Table are represented by a single number reducing the amount of repeated data. These two Tables would have a Relational Link on the CustomerID Field.

It is not always appropriate to use the Relational Model. A Database of your Contacts would not have repeated information nor say of members of a club.

As has already been said it is advisable to spend some time thinking about the design of a database before creating it. Is there repeated data which would be best served with a Relational Model. Once you have started entering data it is difficult to change the design. It is better to put too much in at first as if you find later you do not need some of the data it is easy to delete fields.