Legal considerations when setting up a new business
There are so many things you have to think about when setting up a new business. You have business plans to write, premises to buy or rent, finance to secure, staff to recruit, suppliers to find, marketing to carry out and branding to design; the list just goes on. But what about the legal considerations of setting up a new business?
First, you need to decide what sort of legal structure will best suit you and your business.
The simplest form is a sole trader, which is where a self-employed individual runs their own business. This isn’t suitable for businesses that have more than one owner, so if there are two or more individuals involved then the equivalent option is a partnership. This involves the partners sharing management responsibilities and the profits.
The other main option is a limited company. This has the benefit of limiting the personal liability of the owners, but it is a more complicated structure that has accounting and tax consequences. In recent years the law has allowed partnerships to incorporate, creating the Limited Liability Partnership or LLP.
We can assist you in identifying the options and weighing up the pros and cons of the different company structures available to you. If you opt for a limited company then we can deal with the company formation. If you decide on a partnership then we can prepare the partnership agreement.
We can also help you secure your intellectual property rights where your business in reliant upon an idea or a design that you wouldn’t want others to copy. This can involve basic copyright, trade marks, design registration and patents.
You will need to consider your position with HM Revenue and Customs. The tax you and the business pay will depend on various factors, including the business structure you choose as well as your annual turnover, your taxable profits and whether you employ staff. Taxation systems include Self Assessment, Corporation Tax, VAT and PAYE/ National Insurance if you employ staff.
Once you start trading you will need to make sure you have sufficient insurance in place, including public liability insurance. If you employ staff then you will need employers liability insurance, along with employment contracts for each employee and where appropriate arrangement will need to be made for a workplace pension scheme.
