From structure to cash flow, getting a new business off the ground is difficult to master. There are a number of key areas that an individual wanting to set up their own business may wish to take professional legal advice on, including:
- Company structure – whether to trade as a sole trader, partnership or limited company
- Business premises – making sure you choose the most appropriate premises for your business
- Contract terms – understanding your legal responsibilities to customers and suppliers
- Business ideas – protecting your business ideas and confirming ownership, as well as ensuring that you’re not infringing the rights of other businesses
- Employment law matters – ensuring you are compliant with current legislation
- Disaster Planning – protecting your business when things go wrong
If you have just started up on your own, the likelihood is that you are a sole trader. Being a sole trader is, in many ways, the most exposed and your own personal assets are at risk. Conversely, they have the fewest regulations to adhere to, whilst companies have the most reporting obligations but are significantly protected. ‘Limited liability’ is afforded to individuals running companies or LLPs which means that when problems are encountered, it is the company or LLP which is sued, not the individuals behind it.
Deciding on a 3-year serviced-office; 80-year full-repairing lease, or freehold premises can be a daunting task. Each has immediate financial consequences, such as the Rent, Deposit, Stamp Duty, or Purchase Price. You will need to consider what type of business premises is most suitable to your business needs and long term goals before committing.
Whether you use Purchase Order Forms, have Terms and Conditions, or have no ‘standard’ paperwork whatsoever, you should have written contracts and these need to be effective in two ways – protecting your cash flow and tying your customers into the terms in which you want them to behave. They can be seen in a positive light as in how transparent your business processes are. If and when a dispute does arise, these contracts need to be able to cope with the scrutiny that they will inevitably be placed under.
Trade marks, company name registration, domain name registration and other forms of intellectual property protection can help protect your valuable business ideas and developing goodwill from being exploited by others. Unfortunately, this happens all too often. You need to think about protecting a desired name at Companies House and trade marking that name in the UK or abroad, and perhaps also securing your ideal website address.
Employment Law Matters
Getting the right employment contract can be the instigator of harmony between you and your staff, and can also save the day when it comes to disputes later on. Also, you may wish to seek advice to ensure you are complying with current legislation and that you know what liabilities you have to your staff under employment law.
What if the worst happens and your offices burn down, or you and your business partner fall out or one dies? What if the business needs to be wound-up, or parts of it need to be sold? Having director/shareholder/partnership agreements in place can help to avoid many of the big decisions turning in to even bigger disputes.