By August 18, 2014 Read More →

Legal ‘need-to-knows’ for start-ups

Make sure you have it all covered with Mark Edwards from Rocket Lawyer

Mark Edwards photo croppedMaking the transition from employee to entrepreneur is challenging enough without having to worry about the legalities involved in starting up your new venture as well. But to ensure that you start off on the right foot, making sure you and your business are legally covered should be one of your top priorities – this will help to protect you from any potential legal disputes later down the line which could cost more time, money and hassle than you would like. So here is what you need to know when you decide to make the leap.

Brand your business

You may have a few ideas for the name of your business but you need to make sure it is original and doesn’t infringe on somebody else’s trademark or copyright before you begin to trade on it. Remember that it must not be misleading, obscene or give rise to any obvious confusion. Enter prospective names through Companies House and in just a few seconds you’ll find out whether the company name has already been registered. Spending a few seconds doing this now could protect you from future potential name infringement issues later down the line.

Choose your business structure

There are usually four choices in the structure of your business so do spend time weighing up the pros and cons of each. Depending on whether you operate as a sole trader, within a partnership, a private limited company or a limited liability partnership, your choice is a commitment which will affect everything from the amount of administration you will have to handle, the amount of tax you will pay, whether the business is eligible for certain tax reliefs and grants and much later down the line, how the business can be sold if you decide to go down that route.

Keep on top of accounting and bookkeeping

The law requires you to record and keep track of all financial transactions so do make sure you’re organised with paperwork from the start and keep all copies of invoices, receipts etc safe, as you will need these to tally up the numbers at the end of every business year. The most straightforward way to manage this is to use a computer-based double entry accounting system – this method doesn’t take a lot of time and ensures that any potential errors are kept to a minimum.

HMRC may also ask to see your business records to ensure that you are paying sufficient tax, your staff are receiving their wages, National Insurance contributions are being properly made and that the business isn’t being used for money laundering purposes, so it is important that you keep records up to date.

Health and Safety

If you have five or more employees, you are legally required to have a written Health and Safety Policy. Not only does having one demonstrate that you are a responsible employer, it also gives staff the confidence that they are working in a safe environment, protecting them from injury and you from liability. The main issues the policy should cover include fire safety, first aid arrangements, risk assessments, manual handling and use of display screens.

Hiring staff

As your business gets off the ground, you’ll need to think about assistance and staff. Overlooking new employee contracts and legalities is a common start-up error – and an illegal one! Even if you hire help from close family and friends, you are still legally required to issue an employment contract within two months of employment otherwise you could face a fine – not what you need when starting-up!

Employment contracts lay out clear expectations for you and the employee, laying the foundations for a mutually rewarding relationship. Ensure you cover key areas such as pay, benefits, hours, holiday, sickness and termination and both parties know where they stand.

 

ABOUT THE AUTHOR

Mark Edwards, General Manager at www.rocketlawyer.co.uk, an online legal service providing start-ups and small businesses with easy-to-use, professional legal documents and affordable help from specialist lawyers.

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