Setting Up A New Business
There’s a whole lot of work goes into creating a successful business. You need to start with an idea which has the potential to make you money and then you need to make that idea a reality and either keep it viable over the long term or be ready to move on when the time is right. It’s understandable that new entrepreneurs can be so focused on developing the part of the business which makes them money (and allows them to pay their bills) that they may skip over the dry, legal stuff, but actually legalities are very important. Here are four legal points to keep in mind as you develop your business.
Check that your business is actually legal
There are some kinds of businesses which are simply illegal and while many of these are obvious (smuggling for example), others may take you by surprise until you actually check. More often, however, you will find that your business per se is legal, but that there will be laws to which you must adhere in order to conduct it in a legal manner. For example, if you are making a product, you will probably find that it needs to meet certain safety standards. If you are offering a service, you may also need to comply with legal regulations. Likewise, your local council may have regulations about where you can conduct your business. If you’re operating a purely “knowledge-based” business, then it may be acceptable for you to work from home, but if your business could impact on your neighbours in any way, for example, by increasing the traffic in your street, then your council may require you to move it elsewhere.
Choose your name with care
Even if you only plan to do business in the UK, you need to remember that these days, there are people of many nationalities and languages and it’s therefore a good idea to check that your name works in at least the main ones (e.g. it’s neither inadvertently funny or offensive). Also check that it’s actually legal in the sense of in compliance with relevant UK laws. In the UK, this is actually pretty straightforward, unless, again, you had plans to name your company something offensive. Your next step should be to check out whether any companies in your niche have trademarked your chosen name and if so, you need to have a rethink. In fact, you probably want to avoid having a name which sounds similar to anything used by your direct competition. You would probably also prefer to have a name, which ties in with an internet domain and social media handles, the former of which needs to be bought. Sorting all of this out right at the start can make your promotional process a whole lot easier.
Decide what kind of legal structure you want/need to be
This is where a lawyer and/or accountant can come in very helpful. They will be able to look at your business forecasts and give advice on what options are open to you and which one could suit you best. If you’re just starting out as a side hustle and want to put off this kind of decision until you have been in business for a while, then as a minimum you absolutely must register with the inland revenue as self employed.
Take out relevant insurance
Insurance is a broad topic and it’s a crucial one for the self-employed and business owners. To begin with, you may well need to think seriously about insuring yourself against the possibility of accident and/or illness. You will also need to think about any event for which you could be held liable and take steps to protect yourself. Remember that, quite bluntly, being without insurance leaves you vulnerable to having to settle unreasonable claims purely for lack of funds to defend yourself. You may find that getting insurance, particularly at a reasonable price, depends on your meeting certain criteria, e.g. getting appropriate certification and it’s a good idea to look into this well in advance.