14th September 2020
Many people have toyed with the idea of starting their own business following the impact that covid-19 has had on companies and job security.
With hundreds of thousands of people sadly being made redundant, and likely many more to come with the UK in recession and the Government furlough scheme coming to an end, now might be the right time for some to set up their own businesses.
Often entrepreneurial spirit is tapered down by the pull of a stable employed environment, but when people are made redundant or are starting to feel less secure, it can be the springboard needed to finally take the plunge.
Of course, starting your own business will always come with high risks and starting a new venture whilst we are still riding the storm of a global pandemic might be particularly tricky start. But for those in certain industries with an appetite for independence and the skill sets required – perhaps 2020 is the year to branch out.
In this article we take a look at some of the advantages and the legal considerations to make when starting a new business.
Your friends and family might think that you are mad for considering starting a business during a recession – and one that might hurt globally for some time. But did you know that some of the biggest, household name brands started in difficult times.
Microsoft, Fed-Ex, Burger King, WhatsApp, Airbnb and Disney – are just some companies that were start-ups during various recessions.
Some food for thought…
Once you have evaluated the viability of your new venture and established how you will fund your businesses it is important to gain an understanding of some legal aspects. Every business is different, and you may find that as your business grows you require more professional advice, but here are some starting points.
How you set up your business from the start is important. There are various types of business structures that each come with their own advantages and disadvantages. The most common structures tend to be Limited Company, Sole Trader or Partnership, but your accountant or solicitor will be able to advice which is the best structure for you depending on your business objectives.
Registering Your Business
Once you have decided on your structure you may need to formally register your business for example if it is company you need to set it up and register it with Companies House. You will need to check that the name you use for your business is available and is legal.
Contracts, Agreements & Terms
When starting out a new business is it always advisable to start as you mean to go on. It can be tempting to jump into contacts, take on clients and hire staff quickly to get your business off the ground, however, consider the risks. Having robust contracts and agreements under your belt will allow you to protect your business and make your agreements work in your favour. This is particularly important for start-ups in challenging climates where you might need a degree of flexibility.
Tax can be a complicated subject and if you haven’t run your own business before or had first-hand experience of dealing with tax then you are likely to need some guidance as it is not something that you want to get wrong. You should explore how you can run your business tax efficiently, how to best structure your business, how you will pay yourself and any employees and also any tax breaks or allowances you are entitled to make use of.
If you will require business premises such as a shop, office, workshop or warehouse etc. then there are various decisions to make and things to consider before signing a lease. If you are new to taking on commercial property, then is it advised to seek professional advice so that you are fully aware of your responsibilities and commitments. It is important to get the head of terms agreeable so that they mirror your business objectives and allow a reasonable degree of flexibility and security. If you are planning on working from home and setting up your business there then you need to check that you are allowed to do so under planning laws, under any residential tenancy, or restrictions in your house deeds or mortgage documents, and what impact this may have on your home insurance, Council tax / rates etc.
Business Partners & Staff
When taking on staff it is important to familiarise yourself with current employment laws. This is an area of law that is always evolving, so even if you have employed staff in the past, it is worth checking your knowledge is up to date. An employment solicitor can draw up employment contracts and provide you with a toolkit of documents that you will need as your business grows. Dealing with employees can take up a lot of your time as a business owner and the consequences of making mistakes can be catastrophic. If you are considering going into a partnership with others or one other person, then a partnership agreement is one of the most crucial legal documents you can invest in. If you are setting up a company with others then you should consider a shareholders agreement as well as looking at the company’s constitution documents.
Specific Legislation, Licenses & Permits
Depending on which sector you operate in there may be legislation that you need to comply with. It is key that you understand your obligations and have the correct training, qualifications, policies, and certificates in place before you start operating.
There may be other legal considerations or procedures to put in place before you can start running your business. Whilst seeking professional advice from accountants, financial advisers and solicitors can be costly, it is extremely important to get your business started on the right foot to avoid problems later down the line and maximise your chances of success.
Our Business Team at Lamb Brooks can offer Fixed Fee appointments for budding entrepreneurs or those considering starting a business for the first time. During this appointment you can obtain answers to your questions or concerns and soak up the knowledge of experienced Commercial, Employment and Property lawyers.
For advice, please call 01256 844888, email email@example.com or speak to our online chat assistant.
Our town centre offices are open for face-to-face meetings, with protective measures in place and car parking facilities.
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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
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