Legal Foundations: Navigating Your Business Essentials

Starting a business and following your entrepreneurial ideas is an exciting endeavour! But for your business to be successful, it’s important to lay down the right foundations. Starting a business will require you to think about a range of different legal factors. Legitimate businesses need to comply with these rules and regulations to ensure that your business is operating legally. 

Not sure what laws and regulations your business needs to comply with? Our blog is here to dive into the key areas of compliance that you should consider when starting your own business, so that you can avoid legal problems down the line. To learn more about your business law essentials, keep on reading.

Types Of Business Structures

When it comes to starting any kind of business, it’s crucial to determine the legal structure of your business before you move forward. Defining your business structure is extremely important, and acting as the foundation of your future company. If you fail to disclose your business structure correctly to begin with, this can lead to complications later down the line, as each structure has its own set of legal compliances. 

• 
  Sole Traders - Sole traders are individuals who run businesses on their own, which is the simplest business structure. This individual is the owner of the business and responsible for all aspects. Many people choose this option because of its flexibility. 
• 
  Limited Companies - A limited company is a separate legal entity from its shareholders (owners). Here in the UK, there are private and public limited companies (Plc and Ltd). Limited companies require more administration and financial reporting in comparison to sole traders, as ownership of these businesses is determined by shareholding. 
• 
  Partnership - A partnership is a business in which two or more individuals come together to run a business. All responsibilities, profits and losses are outlined in a partnership agreement between owners, but other partners may also invest in the business. 

Legal Obligations When Starting A Business

Now we’ve covered the different types of business structures that are out there, it’s time to look at the legal obligations you might have when starting a business. 

Intellectual Property 

Securing the intellectual property (IP) behind your business idea is a vital step, as it holds immense value for your business, often forming the focal point of your company. Intellectual property refers to any of the inventions, designs, symbols, names, images...etc used by your business. This includes trademarks, copyrights, patents, content...etc. 

You need to safeguard your intellectual property to preserve your business, and having no intellectual property rights (IPR) if you come to sell your company can result in a range of issues down the line. Potential buyers will be looking for clear rights to use the IP that is integral to your business. 

Permis & Compliance 

Different businesses require different licences and permits, depending on the type of business you are running. Some key things to consider are: 

Local authority approval - Certain businesses will require licences from local authorities to trade legally. 

Industry-specific regulations - Understand the regulatory requirements of your industry to obtain the necessary permits and licences. 

Planning permission - Check with your local authorities regarding planning permission, especially if you are altering the building for business use. 

It's important to comply with local and government legislation to avoid legal penalties, fines and even criminal charges. Failing to comply with rules and legislation can reflect badly on your business, leading to legal battles in worst case scenarios, and even financial losses.

Contracts 

Legal contracts are absolutely essential for any kind of business and trading without a binding agreement is a high risk move for any business. Not having a signed contract in place can lead to a range of problems. Reasons why you businesses can benefit from contracts are: 

• 
  Easier for preventing disputes if there is a written agreement 
• Supplier, shareholder and employee contracts
• Provides terms for customers and business interactions 

Essentially, having established contracts for your business will outline any rules or company policies that your business has, which makes it much easier for employees, suppliers and stakeholders. If anything goes wrong, or someone is unsure of a policy, they can check their contract, making it easier to go about problems and disputes. Contracts are put in place to protect both the business and others involved.

Employment Law

If you're planning on employing staff for your business, it's absolutely essential to have an understanding of employment law. Employers and business owners need to familiarise themselves with employment law so that they can effectively understand the rights of employees. This includes anti-discrimination laws and employee rights, which should have written contracts or statements. These contracts should detail the terms and conditions of employment, pay, working hours, and the holiday policies given by your company. 

In addition to this, all businesses need to comply with minimum wage laws, as well as having proper procedures for disciplinary actions and grievances. Contracts are important for employees to know their rights, and this can help to avoid disputes or issues in the future. If you need help with employment law considerations, our services may be able to help you. 

Tax Law & National Insurance

Taxes and national insurance are another crucial part of any business, and you must be aware of your tax obligations. Here in the UK there are various tax obligations to be aware of, including: 

• 
  Corporation Tax 
• Value Added Tax (VAT) 
• Income Tax
• National Insurance contributions

Businesses must register with HMRC immediately, as this is essential for income tax, and maintaining national insurance compliance. If your business is exceeding £85,000 a year, then you must register for VAT. There are some VAT exemptions for specific goods and services, but you will need to look into whether your business is exempt from this. 

National Insurance and other insurance for your business are also extremely important. This provides financial protection, and having insurance for your business can help you in any case of theft or damage. Unexpected events or break-ins can be detrimental, and having insurance is crucial for  business owners, investors, employees and even customers. 

Data Protection

In today's digital world, with more and more of our data being stored online, data protection in businesses is becoming more and more important. Businesses now need to adhere to data protection laws to ensure the safety and privacy of clients, employees and investors. The GDPR (General data Protection Regulation) has been made a part of the UK law, establishing these rules. 

Additionally, if businesses want to use any employee or client data for any purpose, they must obtain consent from the individual before using any of their personal data. And, appropriate measures must also be taken to ensure data security policies are being adhered to. 

Health & Safety 

Health and safety obligations are also extremely important for any business. Here in the UK, if you have more than 5 employees, you must have a written health and safety policy in place. These policies should outline the steps that need to be taken for the health and safety of employees or customers. It should identify the potential risks, and establish the procedure for reporting accidents. 

Businesses also need to have regular risk assessments carried out, so that any hazards can be spotted and mitigated effectively. Training must also be provided to all employees so that they can gain an understanding of hazards, safety protocols and what to do in an emergency.   

DJP Solicitors: Employment Law Advice You Can Rely On 

Starting and running a business is no easy task, but with careful thought and planning, your business can flourish. We’ve covered a range of essential areas in which your business needs to comply with regulations and laws. From intellectual property to employment law, it can be beneficial to seek legal advice when setting up your business. 

Here at DJP Solicitors, we take pride in our effective legal services, including our employment law advice. If you’re looking for quality employment law advice or employment lawyers, look no further! Our law firm is here to help. Simply get in touch with us today to speak to one of our solicitors or lawyers today!