Top tips for new businesses

Thursday 2 April 2015

Setting up a new business is certainly an exciting endeavour. Entrepreneurs are by and large enthusiastic and ambitious about their chosen sector. However, despite gaining valuable experience in, or thoroughly researching the relevant industry, the legal pitfalls of starting a new business are often overlooked.

Here are our top tips to get your new business up and running:

Make sure your business name is ‘available’

Whilst it is important to consider if and how your choice of name will attract customers, you must also make sure that you are not inadvertently infringing any intellectual property rights of another business. Carry out searches of:

• the Companies House register;
• trade and telephone directories;
• the UK Intellectual Property Office trade mark register; and
• the internet.

Choose the right business ‘vehicle’

Limited companies, partnerships, limited liability partnerships and sole trader entities all have distinct features and advantages. Take proper tax and structuring advice at the outset to ensure that you select the right ‘vehicle’ for your business.  Changing a business vehicle at a later date will cause disruption to your business and could be more costly than taking the appropriate advice at the start.

Formally document relationships between business partners

A properly drafted Shareholders’ Agreement, Partnership Agreement or Limited Liability Partnership Agreement will establish the rights and obligations of the parties to each other and to the business. A verbal or informal agreement between business partners may seem sufficient and a great way to save costs in the short-term, but informal agreements are difficult, if not impossible, to enforce later down the line. The resultant problems could also cost you a great deal of money and take up considerable management time to resolve.

The correct legal and professional support at the outset will help to ensure that your business starts off on the right foot, and avoid stressful, costly legal troubles later on. Please contact me using the details below for advice.