Registering your business and choosing your structure will be one of the first steps in legal action.
There are many legal issues to be aware of when you start a business. Some may be obvious, like understanding tax regulations for the industry. You might have yet to think of others, like registering your trademarked logo.
Many resources can simplify the process. You can take it step-by-step and ensure you have everything you need before you begin.
1 – Select your structure
Registering your business is a crucial step from a legal standpoint. Decide whether you want to register your business as a sole trader or a limited company. You will need to consider the pros and cons of each structure.
The structure of your business will affect how you pay taxes and get funding. It will also determine the way you secure financing.
Depending on the structure, you will need to register where you want. If you’re setting up a limited company (LLP) or a partnership, you may need to register with Companies House.
2 – Identify the person in control
You must appoint directors if you want to register a limited company. Also, identify those who have significant control over the business. This information must be included in the registration. The UK government website provides guidance about registering with Companies House and how your legal responsibilities vary depending on which type of business you’re setting up.
3 – Trademark your logos
Also, you will need to select a name and ensure it isn’t already used. Although you can search for existing trademarks in the UK on the Intellectual Property Office website, it can be labor-intensive and difficult to determine if a similar name is a trademark infringement. A skilled solicitor can assist you in creating and, if required, registering your unique business name.
In the beginning stages of your business, it is essential to consider the size of your business and whether your business plans to trade abroad. While you may not be ready to do so at this stage, it is essential to research trademarks in these countries.
You may also register logos, slogans, and jingles as trademarks or service marks. A solicitor can also help you estimate the cost of protecting your intellectual property assets. Although registering may not be economically feasible, copyright could provide adequate protection.
4. Keep accurate records
All businesses must maintain accurate financial records detailing all transactions, income, and expenses.
You can either record income or expenses the day they are invoiced/billed, or the day the money is transferred. To calculate your tax return at year-end, you must keep records of all income and expenses.
Limited companies will require you to keep more records. You will need to save more documents than a sole trader. Keep receipts, bills, and cash books. Also, you must keep track of all assets and debts owned by the company. You should also keep records that can be used to determine the stock value at the end of each financial year.
A limited company must also keep financial records. This includes details about its shareholders, directors, and company secretaries, results from shareholder votes and resolutions, and information about those with significant control. Companies House must be notified if your records are not kept at your registered office.
5 – For LLPs, get a members’ agreement
A members’ agreement is required if you want to set up an LLP. This will govern how the LLP operates. While you can create one yourself, having a lawyer prepare it for you is best. This will ensure that the agreement is legally binding and includes all vital information. This applies to many business contracts. Before hiring employees or doing business with others, a solicitor should review them.
6 – Understand your data obligations
Your data protection obligations should be known. You have the responsibility to protect the information of businesses and individuals you purchase and sell from. However, it is only legal under the current data protection regulations if they consent to the collection or if the data is required to fulfill a contract or comply with a legal obligation. Many businesses collect customer data for market research and targeted advertising purposes. However, it is essential to be careful about how you approach this to ensure that your data collection and processing comply with the law. It is vital to ensure that you only collect the necessary data about your customers and suppliers for the intended purpose.
7 – Employers’ liability insurance
Employers’ liability insurance must be purchased for staff members if you plan to employ them. It should cover your business up to PS5m. If you fail to comply, you could face severe penalties. This is one of many types that are mandatory for business insurance. However, you can only face significant fines if you comply. Talk to an insurance broker about other options that might help protect your business.
8 – Hire a solicitor to board
While many of these processes can be completed online, it is still a good idea to seek professional guidance when setting up your company. Even if your business is established, it’s possible to get lost in the complexities of changing regulations. It may not be easy to stay on top of your legal obligations without professional assistance.
