650,000 people set up a new business in the UK during 2016 according to the Centre for Entrepreneurs and these figures showed no signs of slowing down in 2017.
No doubt, there are just as many budding entrepreneurs in the UK planning a business venture or launch in 2018, but what do you need to know from a legal stand point? Senior Partner, Jeremy Blatherwick and Mandy Kaur, a commercial solicitor from Tallents Solicitors in Newark look at the key points.
Deciding on your type of business
“First things first, some decisions will be based on the type of business you want to set up, where you’re going to work and whether you intend to employ anyone to help you,” says Jeremy.
“Choosing the correct company structure is vital to your success. You may be happy to work on your own as a sole trader, but you will be personally responsible for your business’s debts.
“So you may wish to consider setting up a limited company instead. Your business finances will be separate from your personal finances but you’ll encounter more reporting while running the business, meaning you’re likely to need the help of a solicitor or accountant.
“Or, if you’re planning on going into business with two or more people, then you could set up a limited liability partnership to ensure the responsibilities for the accounting and any business debts are shared between you all.”
Where are you going to work?
If you’re the only employee in the business, then you may be able to work from home. You’ll need to check with your mortgage provider or landlord that they’re happy for you to do this. Additionally, if you live on a newer housing estate, there might also be restrictions in your deeds as to the different types of businesses that can be run from home and whether permission needs to be sought. A solicitor can help you clear up some of these issues.
Mandy has specific legal expertise in helping commercial clients secure business premises. She says:
“Usually, if there’s more than one of you in the business, then you’ll need business premises. Commercial leases can be a minefield for the inexperienced, so we recommend you speak to a solicitor at the earliest point (before heads of terms are agreed) to ensure you know exactly what you are signing up for. You definitely don’t want to be caught out financially by something that you signed for without reading the fine print.”
It’s especially important for anyone considering renting part of a commercial property to be aware of potential Service Charges and how they may affect their tenancy.
Your commercial solicitor can explain everything to you when negotiating your lease with your potential landlord.
Will you need employees?
“Employment law is a complicated area to grasp,” says Mandy.
“There’s so much to consider for the first-time employer: minimum wages, ensuring your staff have the right to work in the UK, organising employer insurance, job descriptions including terms and conditions, employment contracts, registering with HMRC, staff handbooks and setting up workplace pension schemes, to name but a few.”
So, who can help you set up a business?
“Luckily, your commercial solicitor can help guide you through all of these processes. In the early days, you may think you’ll be saving money by doing some of these elements yourself but if it comes down to a legal dispute later on, you’ll be glad you invested some time and money in finding a good business solicitor to work with.
“Tallents’ commercial law department has extensive experience in advising would-be business owners about these kinds of issues. For more information, please contact us.”