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This article aims to explore the legal issues that businesses face. Many small businesses start trading without really considering the issues that ought to be addressed. Often they will take a Tenancy or a Lease to a premises without taking legal advice and employ staff sometimes starting on a part time basis without realising the responsibilities that come with that decision. The success of a new business often depends upon the planning stage which takes place before the business considers opening its doors to the public or providing a service and a lack of planning can lead to business failure. Here are a few of the issues to be considered: –
You need to consider whether the type of business that you are operating requires some sort of permission from the Local Authority or from a Regulatory body before you can open your doors. As an example if you are thinking of opening a cafe or a takeaway you would need to consider whether the necessary planning permissions are in place for the premises you want to use. If you are intending to produce a product you need to establish whether there are minimum safety standards that apply. It is often worth contacting your Local Authority, a trade body or a specialist business lawyer to establish what sort of advice you require.
Naming your Business
The name of your business is very important and quite often a lot of time is spent thinking of snappy names that will stick in the memory. However, many new businesses don’t check if they are able to purchase the domain name to correspond with their name or fail to conduct searches to check that their name won’t cause offence to an existing business that trades under the same or similar name. This often leads to a Cease and Desist letter from a set of expensive London lawyers. In a recent case a local convenience store named itself Singsburies and was challenged by the global supermarket over that. It may well be that the owner has a strong sense of humour as he has now changed it to Morrisings but on a serious note if you have spent a lot of money on signage and marketing for your business you don’t want to be in a position 6 months down the line where you have to change the name to avoid legal action. It is worth taking advice from an intellectual property specialist as it shouldn’t cost an awful lot of money and could save you potential difficulties in the future.
Many small businesses take on friends or family as staff and don’t give a lot of thought to the implications of having employees. It is important you speak to an employment lawyer prior to taking on staff as all staff have the right to a written set of Terms and Conditions and there are minimum standards in relation to rates of pay, payment of pension and other rights which you need to adhere to. It is worthwhile meeting with an employment lawyer to discuss the best way to employ your staff as there are various options ranging from having agency staff, self employed contractors, full time staff or casual staff. There are different implications for each type of worker or employee and whilst the employment legislation is incredibly complex a specialist in the area ought to be able to see the wood for the trees fairly easily. Failure to comply with the rules can lead to serious consequences including in some cases criminal liability for failing to pay the national minimum wage.
Obtaining your Premises
Whether you are entering into a short term business tenancy of a longer lease it is always worth obtaining advice. Leases are always complicated documents and can often contain clauses which whilst appearing innocuous at the start cause difficulties later on. Also, an experienced commercial property lawyer will be able to advise you about the incentives that a landlord may offer you if you want to improve the premises. It is important to protect yourself if you intend to spend a lot of money customising a business premises and advice is essential.
Structure of your Business
There are a number of choices that you can make about how your business is structured. You could be a sole trader, a partnership, a limited liability company or a company amongst a myriad of other options. An experienced business lawyer will be able to advise you which trading vehicle best serves your needs. Whilst being a sole trader may be the simplest option it also carries with it unlimited liability which you may wish to avoid. It is relatively easy to set up a new company with the assistance of a business lawyer and an accountant and many new businesses are surprised at how cost effective that advice can be. There are various government funded organisations which provide free advice for new businesses and you should make sure you take that opportunity and always remember if you don’t as you don’t get.
Finally, whilst you may be excellent at producing the product you sell or the service you offer most successful people concentrate on what they do best and use the expertise of others to make sure that the legal framework of their business is correct. Legal work is a little like Dentistry, you can do it yourself but it is likely to be painful if you do.