A Legal Guide to Setting Up a New Business

Our MD Andrew Bradley, takes a look at some of the matters you need to consider from a legal point of view when starting your own business.  For further information, please contact Andrew@bradleyhayneslaw.co.uk or call 010-5 900919.

Structuring your Business

How you decide to structure your business is important to its success and how you intend to expand in the future. Why is it important to choose the right structure for your business?

• There are many ways in which you can structure your business. For example: sole trader, limited liability partnership, partnership, private limited company or public company. You will need to give consideration to the pros and cons of each structure and the tax implications you will have for choosing a particular structure;
• The structure that you choose will determine how easily you can sell your business or leave your business to your family or others;
• The business structure may also determine whether others can remove you from the business or make decisions in respect of the business.

Choosing the right business premises

An important aspect of starting and running a business is choosing the premises. Whether you run your business from home, or buy or lease somewhere to run your business from, you will have responsibilities. What should you consider when choosing the right business premises?

• If you decide to lease a premise, it is essential that you fully understand the terms of the lease and are able to identify any hidden liabilities and obligations;
• It is important to negotiate the best outcome for you on a lease, including appropriate rights to end the lease;
• Depending on the size of your business, you should consider whether you are eligible for any discounts on business rates;
• If you decide to run your business from home, you need to consider any restrictions applicable to you.

Financing your business

As a business owner, you may decide that you will need to finance your business. There are several different sources of finance available to businesses. The type of finance that you will need for your business will depend on the reason and purpose behind the borrowing. Before financing your business or taking on a large commitment, you should consider:

• Whether the commitment will cause serious damage to the health and profitability of your business;
• What legal implications will be placed on the business, its directors and owners if you decide to take on a loan, debenture or shareholder agreement;
• How to negotiate the best possible terms in the relevant contracts;
• What protections are in your contracts with customers and suppliers to protect against any bad debts.

Goods and Services

It goes without saying that it is essential that you do not start trading without having the correct contract or standard terms and conditions of business in place with your customers. Why is this essential?

• It will provide certainty to your customers and protection from deceitful customers;
• It will manage the liability and risks faced by your business;
• Not having a contract, or having a badly drafted contract, can be unenforceable and can cause future risks and costs to your business.

Health & Safety

If you have employees working for you, you must consider the Health and Safety at Work Act 1974. What consideration must you give?

• If your business operates in industries with known hazards, such as chemical plants, you will need to be familiar with specific regulations relating to those industries;
• If there are serious breaches of the Health and Safety at Work Act, you may face criminal prosecution, especially if a fatality or injury has occurred. If found guilty, you can be fined and/or face jail for up to two years in some cases;
• In addition to criminal prosecution, you have a common law duty not to negligently expose staff to harm whilst they are at work. You open yourself up to civil claims by the injured employee, or, where an employee dies, civil claims by their dependents;
• You must provide any training necessary to ensure your staff are undertaking their jobs safely.

Employment

Employment law is an ever moving and complicated area. It is important that you are aware of the following:

• Duties that you have as an employer to your current employees, future employees, and to the people whose employment you may wish to bring to an end. You should be aware that if you take on agency workers or freelancers under legislation you have some responsibilities.
• Ensure your service contracts or dismissal procedures meet the legal requirements, as badly-drafted contracts can be the cause of employment disagreements.

Your solicitor can check your contracts and procedures to prevent disagreements arising and to help protect you from employment related legal action, especially now that there is no longer employment tribunal fees.

Data

The law in this area has been through a significant change with the introduction of the GDPR on 25 May 2018.

This is a complex area, but in general terms you need to ensure you have explicit consent to hold all data in your business whether it comes from clients, suppliers or employees.  Once you have the data, the key issue is safeguarding that data by implementing policies and procedures that protect it, processing it in the right way and ensuring third parties who you share data with are doing the same, and critically ensuring you have a remedy if they do not.

Getting Advice

To carry out all the above steps efficiently and without any errors, it is essential that you obtain the necessary legal advice. It is all too evident that matters are often left until it reaches crisis point for business owners to ask for a solicitor’s help. Instructing a solicitor from the very start will enable a solicitor to identify problems and take appropriate preventative steps. This will save you money in the future and reduce possible risks to your business.

The corporate and commercial team at Bradley Haynes Law will provide advice on all problems you may encounter as a business. As well as providing you with a full range of solutions to those problems. We are a member of the Law Society’s Lawyers for your Business and offer free initial advice for up to 30 minutes to discuss any business-related matters.

For a free initial meeting or call under the Lawyers for Business scheme to discuss your business, contact Andrew Bradley at: andrew@bradleyhayneslaw.co.uk or call us on 01905 900919.    Please also visit our website at www.bradleyhayneslaw.co.uk.