Starting a business? Name, structure, employees and other things to consider
by Amie Sneesby, a solicitor with the corporate and commercial team at Nockolds of Bishop's Stortford
The coronavirus pandemic has had an undeniably devastating impact on the economy, with the employment rate declining and redundancies increasing.
However, one potentially positive outcome of the pandemic is that it has provided people with a unique opportunity to take stock and think about career options for the future, leading many to take the decision to set up their own business.
If you are considering setting up your own business, take a look at our helpful tips.
It is important to choose a unique name for your business to avoid complaints and possible trademark issues.
If you select a name which is too similar to that being used by another business, it may suggest that your business is connected to theirs or that you are trying to pass yourself off as them. This could result in you having to change your business’s name, pay damages and rebrand signs, stationery, advertising and more, which could be very costly.
You can easily check to see if your chosen name is already being used by checking the Companies House register and the Intellectual Property Office’s online journal.
You will need to consider the most suitable structure for your business, which will depend on your individual circumstances. The principal business structures in the UK are:
This is arguably the simplest form of business. However, sole traders are personally liable for their business’s debts and have accounting responsibilities.
A general partnership is a way for two or more people to run a business together. However, a general partnership has no separate legal personality, which means that it cannot own assets or grant security over them, and the business and personal affairs of the partners are not legally separate. A further possibility is to use a Limited Liability Partnership (LLP), which is a corporate and legal entity separate from its members. An LLP combines the flexible structure of a partnership with the benefits for its members of limited liability.
A key advantage of forming a limited company is that the company’s finances are separate from the owner’s personal finances. Nevertheless, there are additional reporting and management responsibilities which need to be taken into account. In addition, you will need to consider whether you would like the company to be limited by shares or by guarantee, who the members and directors of the company will be and how many classes of shares your company will have, among many other considerations. You will also need to decide upon the most suitable set of articles of association for your company; the articles of association are the key governance document for a company and you can opt for either model articles or bespoke articles.
RULES FOR YOUR TYPE OF BUSINESS
You will need to carry out research into whether there are any specific rules that you will need to comply with for your chosen business, such as insurance, licences or permits.
There are also various rules you must comply with if your business undertakes certain actions such as storing or using personal data, selling goods online and buying or selling goods internationally.
You will need to decide whether you would like to take on staff for your business. If you decide to become an employer you will have various responsibilities, such as running payroll, National Insurance and pensions. You may choose to take on agency workers or freelancers, in which case you will still have some responsibilities; for example, their health and safety.
There are many considerations when setting up a business and this guidance is designed to provide a high-level introduction to some of the key concepts.
If setting up your own business is something that you are considering and would like further advice, please contact our Corporate and Commercial Team, who can provide expert advice and guidance.
* Nockolds, 6 Market Square, Bishop's Stortford CM23 3UZ, email email@example.com, phone 01279 750665.
ABOUT AMIE SNEESBY
Amie joined Nockolds in 2017. She studied LLB law with French at the University of Leeds, following which she attained a distinction in the legal practice course at BPP Law School in Cambridge.
Prior to qualifying as a solicitor, Amie worked in a head office managerial role with one of the UK’s largest retailers. As a result of this experience, she has a solid understanding of the corporate world and is commercially-minded. Amie advises on a wide range of corporate and commercial matters.