Your 2021 Business Startup Checklist3rd Feb 2021
Despite 2020 being a difficult year for businesses, 780,766 new companies were registered with Companies House…at least one a minute. That figure does not include new partnerships and sole traders.
We’re delighted that 2,077 companies were set up in the Bournemouth, Christchurch and Poole local authority area – and that a further 3,166 were launched in the wider Dorset local authority area.
But the excitement that comes with launching a new business should always be accompanied by some important legal checks...
Should You Start Up As A Sole Trader Or A Limited Company?
Sole traders have very little protection under the law. If your business fails you could lose your home.
Directors and shareholders of limited companies also face this risk if they have given a personal guarantee to a bank – although they would not be liable to other creditors.
Going Into Business With A Friend? Get A Shareholders’ Agreement!
Nobody goes into business expecting to fail – or to fall out with their business partners – but sadly that is what happens to many would-be entrepreneurs: 4,938 businesses throughout Dorset and the Bournemouth, Christchurch and Poole local authority areas were dissolved last year.
Protect yourself with a shareholders’ agreement. Start as you mean to go on – put it in writing.
Remember: most legal disputes in business are not between victim and perpetrator but are simply misunderstandings between two people with different interpretations of the terms of their relationship, both acting in good faith and believing that they are correct.
Get The Name Of Your Business Right
Make sure the name of your new business does not infringe an existing trademark – otherwise you face the prospect of renaming your business with all the expense of new signage, new stationery, a new website and even possible legal action.
Also, you may wish to get legal advice to ensure that your trademarks and other intellectual property are protected in case anyone infringes them.
Make Sure Your Consumer Contracts Are Fair And Watertight
This is very important – particularly if you are doing business at consumers’ homes or other locations outside your business premises. Remember to think about your legal obligations with regard to cooling off periods.
Hiring staff? Make Sure Your Employment Contracts Are Legally Compliant
Employment is an extensive, highly complex and fast-changing area of the law that requires expert legal advice.
The price for getting it wrong – even unwittingly – can be very high. Particularly if it involves discrimination, for which there is no limit on damages.
Also, think about having a social media policy. Who owns all the Facebook, LinkedIn, Twitter and Instagram connections if your employees leave? Get specialist advice from employment law solicitor Hugh Reid, 01202 338833.
Think About Your Business Premises
A short-term lease can be a worry with regard to the long-term security of your business.
What if its location and signage are a crucial part of your advertising strategy? What if relocating would involve moving lots of heavy machinery?
For expert advice on all aspects of commercial property law, please contact us on 01202 338833.
Don’t Get Trapped By Unprofitable Customer And Supplier Contracts
Make sure your terms and conditions are watertight – and also that you are not committing yourself to long contracts that turn out to be unprofitable.
Cashflow – or rather lack of it – is the biggest killer of businesses of all sizes, types and ages so it is vital to pay attention to the small print in contracts.
Worried? Get Expert Legal Advice
It’s not just startup businesses that need to think about all these important points. Every business needs to review its legal documentation regularly to avoid potential pitfalls. A good ‘spring clean’ is always wise.
For specialist legal advice on starting a business or reviewing your existing contracts and agreements, contact Coles Miller commercial solicitor Charlotte Lilley, 01202 338833.