Thinking of starting your own business? Unsure if you need to set up a company? It is important that new businesses consider a variety of legal issues, both before and after they start to trade. The key legal issues that you will need to consider include:
The choice of legal structure for the business will depend on what is most suitable for it’s needs. There are several options open to a new business, including:
- Sole trader (self-employment)
- Private Limited Company
- Limited Liability Partnership
- Charitable Companies
Several factors will affect the choice of business medium, such as the nature of the product or services sold, the business plan, finance issues, privacy, filing requirements, number of participators and taxation.
Protection from personal liability is one of the main factors that needs to be considered when choosing the business medium. Operating as a sole trader or a partnership could potentially leave you exposed personally to claims made against the business. However, operating as a limited liability vehicle brings with it statutory obligations which can be onerous for some businesses. It is important that businesses obtain independent legal advice early on so that they can use the most effective legal structure.
Terms and conditions of business
Too many people give little thought to the terms and conditions under which they sell their products or services. We strongly advise that you make sure that your business has the right terms and conditions from day one.
Choose a business location:
Many (in fact most) start-ups begin life at home, operating from the back bedroom, loft conversion or garage. Alternatively, the business may need to rent office or warehouse space, or lease an appropriate retail outlet in order to begin trading. The start-up wants premises that help it operate effectively without excessive costs. At the same time, it is important to avoid being tied to premises that might not suit the business in the future. Different options suit different businesses. Working from home is a good option if all the business needs is a small office space. However, the business should ensure that it has followed the correct procedure and has the necessary consents to use the property for this purpose.
Our solicitors strongly advise that all business agreements are put in writing. Whilst you can record many simple agreements by e-mail or letter yourself, our solicitors can help safeguard your position if the agreement is more complex or valuable.
The business will of course want to keep its customers happy and build up strong working relationships. However, there are circumstances whereby customers may not be satisfied and so the business should ensure that it is aware of consumer protection laws, including the Sale of Goods Act, the Trade Descriptions Act and laws that protect customers who buy online or via distance-selling.
Many start-ups don’t employ people at first. However, once someone is employed, even on a part-time or temporary basis, there are significant legal responsibilities to be complied with. For example:
- An employee has to be provided with a legally-binding employment contract
- Recruitment and selection procedures must comply with laws aimed at preventing discrimination
- Business must maintain proper staff records (vital for tax purposes)
- Working conditions must comply with health & safety requirements
- Business must check that employees are eligible to work in theUK
Coodes Solictors can help you get started with our fixed price packages. Visit our website coodesdirect.co.uk for more information.
Sole Trader Review Package – £125 + VAT
- Consultation to discuss benefits and pitfalls of incorporation (up to 60 minutes)
- Review of contracts and advice
Incorporation Package – £575 + VAT and Company House fees
- Consultation to advise about company formation (up to 60 minutes)
- Preparation of Standard Articles and Memorandum of Association
- Preparation of Standard Terms and Conditions
- Incorporation of business as limited company
Partnership Agreement Package – £550 + VAT
- Consultation and advice about setting up/running the partnership (up to 60 minutes)
- Preparation of Partnership Agreement
Intellectual Property Review – £125 + VAT
- Consultation and review of intellectual property rights including non-disclosure agreement
E-commerce Review and Advice Package – £250 + VAT
- Preparation of on-line terms and conditions
For more information visit our fixed price services website: www.coodesdirect.co.uk.