The new year presents itself as a fresh start for many people, with a number of us using the opportunity to revaluate our career aspirations and goals.
For some, this could mean a journey into self-employment or building a new business. If 2018 is the year you plan on going it alone, or embarking on a new business venture, it can be tricky to know where to start. With financial responsibility and legal requirements, it can seem like an intimidating process.Faris Dean, Head of Business at Watkins and Gunn, says that many people feel both overwhelmed and excited at the prospect of starting a new business. However, “getting the essentials in place is a vital part of setting up a new business, and some things can be easily forgotten” he cautions.
He said: “It can be easy to skip a step, but there can be detrimental damage if you forget to comply with certain regulations, such as steep penalties for failing to have the appropriate health and safety in place.
“These can be easily avoided with a simple checklist, making sure your new business is prepared for its upcoming journey. These are all issues that a company will face during its lifetime, but the earlier these are thought about, the better protected the business will be.”
Here, Faris shares his tips for new businesses in 2018.
- Consider the best legal structure for setting up the business (sole trader, partnership or LLP or Limited company):
- When setting up a limited company consider company formation, compiling the statutory books and having a shareholders agreement in place.
- Consider the best tax structure for trading depending on if it is sole trade, partnership, limited company or charity.
- Mr Dean encourages having the right advisors in place from the start, saying: “The right accountant, banker and solicitor will make all the difference, especially if they’ve been with you since the very beginning.”
- Although accounts do not have to be prepared from the very beginning, Mr Dean advises: “It is worth considering putting in place good accounting foundations such as the right accounting package, right accounting personnel and engaging with an accountant early on.”
- Business owners will have to give thought to the various contracts which need to be in place for the business, including:
- Standard terms and conditions of business
- Supplier terms and conditions of business
- Administrative Contracts:
- Employment contracts
- Associate contracts
- Utility contracts
- Support contracts
- IT contracts
- Outsourcing agreements
- Cloud computing
- Financing contracts
- Venture capitalist
- Crowd funding
- Invoice discounting
- Loan agreements
- You will need to consider the regulatory environment and compliance such as health and safety, environment, insurances, training, anti-bribery, data protection, professional body regulations and codes of conduct, Financial Conduct Authority regulation and Anti-money laundering.
- It is worth thinking about the branding of the business and how to protect it, in order to avoid putting intellectual property at risk.
Mr Dean said: “Copyright, patents, designs and trademarks should all be considered when branding a business, but can often be forgotten about. While protecting your own branding, you should also be ensuring that you aren’t accidentally infringing the copyright of other businesses.”
Businesses should also give thought to registered and unregistered rights, and trademark goodwill.
- There are requirements to comply with when advertising, which include required information on letterhead, website and email.
- Regardless of where you trade from, it is important to make sure the premises from which you are trading is properly structured from a legal perspective. Whether it is freehold, leasehold, license to occupy or whether you are selling or buying commercial property.
- If your business is trading overseas then you may want to utilise some of the resources available such as UK Trade and Investment. Mr Dean says: “You will also need to consider on what basis you will contract overseas and whether those contracts are compliant with local law and are enforceable locally.”
- Once a business is well established, many may consider expansion. This may be done through franchise, distribution, agency arrangements and through incentivising staff by way of employee share options, for example.
Unfortunately, your business may be in dispute with another business or customer at some point. Mr Dean explains: “This may be because of non-payment of monies or because of providing poor quality goods or services. In this case, it is worth speaking to a solicitor to establish your rights, potential disputes and to try and quantify the risks involved.”
Watkins and Gunn offers a wide range of legal services including Accident Claims, Medical Negligence, Wills and Probate, Employment Law, Education Law, Public Law, Business Law, Divorce and Family Law, Childcare Law, Criminal Law, Road Traffic Law and Property.
It now provides a wealth of corporate and commercial services including partnership and investment agreements, buying and selling of businesses and shares, shareholders agreements, advising on commercial contracts and drafting terms and conditions of business.