Legal Considerations for Start Up Businesses
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A recent report has revealed that that the overall number of UK businesses has risen by one million since 2010 and has now reached a total of 5.5 million, representing a 23% increase.
With starting a business seemingly more popular than ever, we thought we would take a look at some of the legal aspects we advise start-up businesses to consider.
Choose your company structure carefully
Before you begin trading, you will need to decide how you want your company to function. For example, you may assume a partnership, form a limited company or else undertake business as a sole trader. Although selecting the structure of your business is often driven by taxation, and is therefore something you would likely seek advice from an accountant on, remember that different types of business structure also carry different legal obligations and implications. Some types of business offer a greater degree of protection over personal assets than others, so depending on the nature of your business and the amount of risk you are taking on, this may also be an important factor in your decision.
Don’t underestimate employment law
If you are going to be taking on employees from the outset, make sure you take the necessary care and attention over your legal obligations. It can be tempting to download a cheap (or free) employment contract from the internet, but be wary that in doing so, you could be setting yourself up for a costly and laborious task when the time comes that you want to put your initial employees on more bespoke contracts.
Investing in tailored employment contracts can safeguard against things such as intellectual property theft and confidentiality issues, alongside putting policies in place regarding restrictive covenants and non-solicitation.
There are many other aspects of employment law that you could, perhaps without knowledge or intent, fall foul of. Employment law is complex and full of pitfalls and protecting yourself against these by taking advice is vital.
Don’t avoid documentation
If you’re all set up and ready to roll, it can be tempting to launch straight into trading without putting legal documentation in place. Although not very exciting, terms and conditions of business protect both suppliers and customers and can be a welcome safety net during times of difficulty.
Even if things are running smoothly initially, failing to instate terms and conditions and other essential contracts under which your business operates can be a mistake should you need to fall back on them at a later date if relationships turns sour.
In any event, having a tailored set of terms and conditions comes across as professional and efficient and for start-up businesses looking to engage new customers, neither of these assumptions are harmful.
Starting a business is an exciting time and with the many different tasks you will need to undertake, it can be easy to overlook the above legal considerations. However, it is important to remember that starting a business of any kind carries risks, and protecting yourself against these from the outset can pay dividends in the future.
For further help and advice on starting a business, contact our team of corporate and commercial solicitors.
