Starting a new business can be exciting, rewarding and hard work. Your new business will rely on your ideas
about what it should be called, what it will do, how it will work, and it is these ideas that will make it unique.
Your company name or business name
Every business needs a distinctive name, both to attract customers and to make sure it is not confused with
any other business. As the business develops its name may become an important asset.
Great care must be taken when setting up a new business to ensure that it has a name which meets all the statutory requirements, does not infringe the rights of others (who may bring legal proceedings, involving both cost and disruption to the new business) and which is adequately protected against others who may seek to use the name in the future.
It may also be important to have your business name registered as a domain name and as a trade mark.
Sole trader, partnership, LLP or limited company?
There are advantages to setting up your new business as a limited company, but it is not necessarily the right
option. You might be better off as a sole trader, a partnership or a limited liability partnership instead. This can
be a complex matter and should be considered carefully.
If only one person is involved, the choice is between being a sole trader and forming a limited company. If there are two or more participants, the business could be a partnership, a limited company or a limited liability partnership. There are other business structures such as PLCs, companies limited by guarantee and community interest companies.
How do I set up my business?
It is important to have your business set up properly. If it is to be a company or an LLP, it must be registered at Companies House. If an LLP or a partnership you need a members or partnership agreement
Going into business with someone else
If there are two or more people involved in the business it is essential that the arrangements between them are discussed and formally agreed. If the new business is a company, the memorandum and articles must be drafted to protect the interests of all parties, and in many cases these should be supported by a shareholders’ agreement. In a partnership or LLP, the partnership or members’ agreement will be equally essential.
Buying a business
Many people go into business by buying one that is already established, and this is when expert and experienced professional advice is really required to avoid the many pitfalls. Buying a house is complicated enough; buying a business much more so.
Taking a franchise from an established business such as Burger King, Domino’s Pizza, O2, ServiceMaster, etc., can be a successful way of going into business for yourself. There is less risk involved because the brand is already established. However, the down side is that you will have to share the rewards with the brand owner. Franchise agreements are complex and care must be taken before signing up.
On the other hand if, instead of taking a franchise, you build up a successful business, you may be able to
franchise it to others.
If you are buying or leasing a shop, office, workshop, etc., you will need to make sure you take the premises on the right terms and deal with any planning or licensing issues.
Whether recruiting new staff, dealing with disciplinary issues, understanding employees’ statutory rights, or having to lay staff off, the constantly changing and complex regulatory framework must be complied with and you need practical advice on how to deal with these issues.
Terms and conditions of business
Your interests can be protected in many ways by making sure that you always deal on your standard terms and conditions of business. These need to be drafted for your type of business and the way you conduct it.
Unless you deal only in cash, you may sometimes have customers who are reluctant to pay. A really efficient and cost effective debt collection service for such occasions is essential.
Business is about relationships and sometimes these break down. If this happens you need someone on your side who can protect your interests in a strategic and cost-effective way.
For further information, contact Jonathan Waters.
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