IF you were to assess every single legal aspect that was required to be put into place prior to setting up in business, most sensible people would choose not to bother.
The pace of regulation, despite the assurances from governments of all shades, has continued to lay a heavy burden on all businesses. However, trying to be sensible the priorities for setting up in business are:
* Your legal structure. Should you start up as a sole trader, or if there is more than one of you, in a traditional partnership or the more popular limited liability partnership? Or whether you are on your own or are in partnership with someone, should you be looking to form a limited company to trade from? All these structures have their pros and cons. The easiest and least regulated are sole tradership and traditional partnership. The most regulated, because of the limited liability status, are LLPs and limited companies. The decision as to which is the right structure between these two, is often a question of tax. Most importantly, how you will be taxed on the remuneration structure you anticipate using.
* If you are going to employ someone in your business, then it will be essential to make sure that you are compliant with employment law. Professional advice, whether from an employment lawyer or an HR consultant will be vital. If you do not have the correct documents in place for your employees, then you can pay dearly for it at an industrial tribunal. As important as having the right documentation, is a basic understanding of what to do and what not to do in relation to dealing with your employees. While plain common courtesy and common sense can go far, there are easy traps to fall into for the uninitiated in the ways of employment law. The best advice is to take advice before making a decision on how to tackle e.g. a poorly performing employee.
* The premises you are looking to trade from could be anything from a spare bedroom in your house, to a unit in a start-up business centre, or a unit that has been built and us readily available in the market. Again, taking professional advice will be crucial. You would not want to become liable for expensive dilapidations and repairs on entering into a lease commitment for a building. It will be essential to take advice from a surveyor and a landlord and tenant lawyer who can advise how to minimise the risks. This early on in your business development, be wary of taking on a commitment for too long a term of years. Either if the business does not take off, or takes off very well indeed, you will be looking to move on sooner than your term of years ends.
* Other things to think about include setting up a robust set of terms and conditions of trading for your business, so that you can negotiate the best outcome if you have a problem. If you are originating ideas, you need to be thinking about how you can protect your intellectual property rights. Can something be patented or trademarked? Again, specialist advice will be vital.
Overall, most successful businesses recognise the need to take independent experienced professional advice, whether it be from HR consultants, accountants, bankers, lawyers or insurance specialists. There is plenty of advice available out there, so the best advice is to take advice!
For more information, contact Howes Percival on 01604 230400 or visit www.howespercival.com
