Understand basic legal requirements
The rules and regulations around company names
Choosing a name for your company is a long-term decision. You will want your name to encapsulate, in a few memorable letters or words, precisely what it is you’re selling or offering. And it will take many years to build your name up in the consciousness of your customers. So you want to make sure you get it right at the outset.
If you’re forming a limited company, you won’t be able to register a name which is considered the same as that of an existing company, or one which could be considered offensive or illegal.
There is a range of rules you will need to bear in mind, and your solicitor can help you. You can also get free advice on business names from Companies House.
Trademarks, copyrights and patents
A trademark identifies your product specifically in the eyes of the public, and when registered, is protected by law, giving you the right to take action against anyone else using it. Similar rules apply to copyrights and patents which exist to protect the fruits of your hard work against rival businesses and others using them without your permission. Unlike patents, which must be applied for, copyrights happen automatically. Again, your solicitor can advise you in this area.
Staying on the right side of the trading laws
There are certain laws, such as the Trades Description Act and Sale of Goods Act, which were drafted specifically to protect the consumer. You must be mindful of these laws and adhere to them.
Trading laws exist for your protection, too, so it is important that you have at least a basic understanding of the law and how it affects your business. You can find out about the trading laws from your solicitor and there are also various books on the subject.
What insurances are legally required?
You should view insurance as a necessity, and a major priority for you business. There are some insurances that the law demands you have, and others which you should take out as a matter of your own protection. You must have employers’ liability insurance, motor insurance (where appropriate), insurance demanded by any contracts you may have, and insurance for certain types of engineering equipment.
Understanding your tax liabilities
Putting business expenses down against your gross profit reduces the amount of tax you will have to pay. That’s why keeping accurate records is so important. Professional advice from an accountant will ensure that your tax obligations are met. Also, the Inland Revenue can deal with your queries direct.
The issue of VAT usually sends shivers down the spines of most small businesses. In effect, you act as tax collector for the Government, collecting indirect taxes on goods bought from you and passing the money on to Customs and Excise. The main thing to remember about VAT is to keep accurate records at all times.
’Should I register for VAT’ is the title of the official guide on the subject which can be obtained from the Department of Trade and Industry. Or you can ask your accountant or local VAT officer for advice.