Above Board: Making Sure You Stay Legal When Starting Your New Business
It’s an exciting time, but make no mistake about it, starting a business involves a lot of paperwork.
As today’s title may have already given away, this article is going to focus on various legalities that you need to consider. Of course, we’re not going to cover each and every bit – this will vary between industries and you really will have to consult a lawyer for certain aspects.
However, for the purposes of providing a general overview, let’s jump into some key considerations.
Are you allowed to use your name?
It sounds simple, but you might be surprised at the number of companies who fall foul of this first point.
They may have picked a business name that suits them down to a tee, only to be infringing on someone else’s trademark.
Fortunately, this is an easy issue to navigate, and a simple online search can usually give you an immediate yes or no answer.
Are you aware of the regulations in your industry?
As we mentioned at the start of today’s article, not all industries are legal. Some are quite relaxed when it comes to legal points, but others are much more stringent.
Suffice to say, the medical industry comfortably falls into the latter category, and for good reason. For example, if you are surgeon, making sure you are aware of Gillick competence might be something that you need to place high in your priorities.
In other industries, some forms of insurance are legally required. In short, this is where you need to perform your own research, and find out what is required.
What type of company are you?
No, this next point doesn’t focus around the type of industry you are involved in, but more about the legal business type. Operating as a sole trader can have its advantages, but in terms of protecting your personal assets in the very worst-case scenario a limited liability company is often preferred. A similar structure to Limited Liability Company is S-corp and if you are not sure which company would you rather choose, you can find many similarities between LLC and S-corp and make the right choice for your business.
There are lots of other things to consider with all of these business types but the point we are trying to make is that you shouldn’t jump in with both feet without understanding everything properly.
The laws on tax
This final point links very well with the previous one we have spoken about. If you are a company, you will of course have different taxation rules than a sole trader. Regardless of the tax brackets that you fall into, it stands to reason that you will need to form everything accordingly.
In some ways, this also ties into the manner in which you have to file your accounts. Again, if you are operating as a sole trader the rules are somewhat different, but as a company you have a legal responsibility to submit your accounts and a failure to do this can have consequences. This is again why it is crucial to understand just how your company type can affect you and your business in numerous ways.