Starting a business can be one of the most exciting periods in your professional life. There is room for creativity, new ideas and a business that is truly yours to shape as you will. But, that doesn’t mean it will be smooth sailing all the way. The fact is that you can have issues from day one if you don’t carefully structure your business in a legal format. Not having these legal structures can be ultimately quite destructive.
So, with that in mind, here are some of the most important legal factors which you need to address prior and during the set up of your new business.
1 – Pick a Name a Good Name When Starting a Business
A big consideration for you and your business will be that of picking a name. Your new business name could say a lot about your business and how it is run, so it needs to be both professional and stand out from the generic crowd of other competitors.
Once you have a business name, it needs to be registered with Companies House. And if there is already a business with that name, you need to either change the name to something that is free or slightly alters your original idea to make sure it is not outright the same as another company. Which can be especially damaging if it happens to be a future competitor.
2 – Understand Business Taxes
When it comes to taxes you may think you know what you’re about, but it takes on a whole new level as soon as you are being taxed as a business rather than an individual. Not only is it more complicated, but the consequences of failing to properly declare or complete your taxes can be that much more disastrous – so you will need a business lawyer to help you with this more likely. An accountant can be essential in this case to avoid any such issue from affecting you in any seriously negative way.
If you rent an office space, remember you will need to also pay business rates. This is basically a tax on the size of the space you rent, something like council tax for business.
3 – Insure the Business
A new business needs a certain level of security attached to it in order to function correctly. If you have an issue in the future, such as in regard to liability, then having the right insurance in place can be vital. Without it, you could find yourself with a big financial loss if you have to pay to cover such costs yourselves in the case of any complaints brought against you. If your business deals in money, in any form, this can be especially damaging.
At the end of the day, not having to pay out of pocket for legal costs can be the make or break for your business.
4 – Create a Partnership Agreement
One of the biggest issues that can arise in the lifetime of a business is a fallout between the different partners or even, perhaps, shareholders. Everyone has different opinions, so being able to guarantee complete agreement
If at a later date, you do experience a breakdown in communication or someone does want to leave the business, then a good agreement can help prevent issues. The fact is that a breakdown between shareholders or partners can potentially destroy a business. So, you need the right level of protection in place in order to keep this from happening (as far as humanly possible).
A partnership agreement isn’t a necessary legal requirement. But, it can save you lots of time and legal expenses in the future. You will need the advice and help of corporate solicitors in order to make sure this is a completely water-tight agreement. Otherwise, you could leave yourself open to much bigger issues in the future.
5 – Open a Business Account
Funding your business via your own accounts may be necessary at first. However, continuing to function and run the business from a private account is not something that you should continue after starting a business. As you may find not having separation from your personal and business accounts quite financially damaging in the long run.
A separate business account can make doing your taxes much more efficient, both personally and via the business, as well as prevent overspending which negatively affects either side of your life. Business accounts can also give you benefits, so it is always a good idea to look out for this when setting up such an account.
When it comes to starting a business, it is important to be realistic and ensure that you meet all legal requirements as you do so. Setting up a business with the correct structure and legal security in place is not only important, but it’s also the law. Without it, you could be setting your business up for a world of issues later down the line.