Setting up a Business
Malcolm Bassett – Senior Commercial Solicitor
If you have any questions or wish to discuss setting up a business, contact me on 01580 762248 or email info@pengelly-rylands.co.uk.
There are many things to consider when setting up a business and making proper assessments and preparations before proceeding is sensible.
Preparing a realistic business plan, based as far as possible on verifiable information rather than assumption, is important as it would help to assess whether the business is viable and what finance will be required to run it.
Having identified the financial requirements, steps will need to be taken to meet them. If you do not have the financial resources yourself, you will need to raise the finance by way of loans and/or investment from third parties. Finding the source of that finance and negotiating satisfactory terms upon is fundamental to the success of the business.
If you are a sole trader, you need to decide whether or not to trade as a limited liability company. If you intend to set up a business with another person or persons, you will have the choice of trading as a partnership, a limited liability partnership or a limited liability company. Whichever is chosen, it would be sensible for a bespoke written agreement to be prepared to regulate the relationship between the participants.
The name of the business needs to be chosen and steps taken to ensure that it cannot be confused with a competitor. Time and expense spent on marketing the business and producing stationery can be wasted if a competitor successfully alleges your name conflicts with its. You need to be aware of the statutory requirements regarding the use of business names, and the words, such as British or Royal, which require official sanction.
If you intend to commence trade from home, you need to be satisfied that this does not infringe any planning laws or any covenants affecting the property. If you intend to trade from businesses premises, you need to be satisfied as to their condition and as to the terms upon which you acquire them, either by purchase or lease.
You need to consider what licences, if any, you will require to trade and what regulations you will need to observe. You will also need to consider whether
you will need to register for VAT or under the Data Protection Act.
If you intend to have employees, amongst other things you will need to provide a written contract or statement of their terms of employment.
Depending on the type of business you may require terms of business for use with customers or suppliers. You also need to consider what insurances you either must have or should prudently have.
The above is not intended as an exhaustive description of the things to be considered when setting up a business, but rather an indication of the range of matters to be addressed before embarking on the venture.
Published March 2010
