Any small business owner will tell you that, although starting a new business is an exciting prospect, there are a whole host of legal requirements for any new business.
If you are starting out for the first time as a sole trader or establishing a small business there are a number of essential legal areas you need to at least consider, if not abide to by law:
Setting up your Business
You will need to decide how your company is going to operate as there are a number of different options open
to you, such as:
Once you have decided on a name for your company it needs to be registered at Companies House if you are putting a limited company together. However, it is also recommended that partnerships and sole traders check the name they are trading under to ensure that no one else is using it.
What type of cover does your business need? This is a good question as it really depends on the type of business you own. For example, if you are opening a shop then the obvious answer is shop insurance, however with the various types of insurance available it’s not always as simple as that. To give you some idea as to the types of insurance available take a look at this non-exhaustive list:
To find out more about any of these read our earlier article on business insurance.
Value Added Tax (VAT)
Not every company will have to register for VAT as it is dependent on your company’s expected turnover.
Register with Inland Revenue
It is imperative that you inform the Inland Revenue that your company has started trading as there could be
hefty penalties if you neglect to do this.
Any company that captures personal details (i.e. customer records) and storing them digitally should register
with the Information Commissioner’s Office (ICO). Failure to do this could result in hefty fines.
National Insurance Contributions (NIC)
Like anyone else working in the UK you will be expected to pay National Insurance Contributions and this is something you should check with the Inland Revenue.
Many businesses require some form of license to operate, such as pubs, restaurants, nurseries and child minders. It’s strongly recommended that you speak with the local licensing department and, in some cases, Environment Health to check.
Other Legal Issues
Apart from the fact that any new business owner should seek legal advice to ensure they haven’t missed anything, it’s very important to make sure you have a legal practitioner on-hand should you or your business require help.