Bournemouth Solicitors

Essential legal advice for existing and start-up businesses

Business law focuses on the commercial areas of law that businesses and companies need to be aware of.

Inadvertent breaches of business law are very easy to commit, therefore if you run your own business it is essential to keep up-to-date on this area of law. If you are found to be in breach this could have huge financial consequences for your business.

To ensure you get your business off to a good start it is essential that you have a good understanding of how business laws may affect your business.

Partnership, sole trader or limited company?

Before you establish your business it is important to decide on what kind of structure it will have. The three main types are partnership, sole trader and limited company.

There are a number of pros and cons for each.

Sole Trader

The sole trader type structure is the easiest type of business to set up. There are no legal requirements in order to set yourself up as a sole trader. The onerous disadvantage is that if your business makes a loss you will be personally liable for the loss. You are not required to submit accounts, but you are expected to keep financial records for tax reasons.

In Partnership

A partnership will come into existence when one or more persons are working on a business enterprise with a view to making a profit. You should get a Partnership Deed drawn up which specifies how the partnership will function and how it can develop and be ended.

The partners will be jointly and severally responsible for any business liabilities that arise.

Again like the sole trader accounts only need to be prepared for tax purposes.

Limited Company

This structure style is the most formal and requires some cost involved in setting up the company. But, unlike the other structures a strong advantage of this structure is that your liability is limited to the amount of capital which you initially invested in the business.

Banks are therefore likely to ask for personal guarantees if they offer a loan.

You will be expected to comply with Companies Act legislation including sending off accounts records and returns at Companies House.

How to register your company name

Business Names are governed by the Business Names Act 1985.  You are expected to brandish your trading name at your business premises, invoices and stationary.

The first step you need to take when deciding on a name is that the name you decide to trader under is not similar to another business. If it is then you may be sued.

A limited company is regulated by Companies House and you must check the directory to make sure the name has not been taken already.

Trading Laws

If you are supplying goods and services then you will need to be aware of certain consumer legislation. For example goods must correspond with their description, be of satisfactory quality and fit for their purpose.

Terms of Trading

If you are dealing with consumers or businesses you need to have Terms of Business drafted. These will cover estimates for work, when transfer of title for goods is considered as occurring and what happens if one party fails to fulfil their side of the bargain.