The legal process behind starting and running a small business

Article by Contact Law 

As a mother running a business you’ll certainly be juggling a lot of responsibilities, such as looking after children, promoting your business, managing staff and balancing accounts. Dealing with the legal side of your business can seem tiresome and inconvenient but needless to say it’s important not to overlook. Here we’ve put together tips on some of the main legal issues you’ll come across.

Choosing a legal structure

You’ll need to choose the structure for your business that best suits your circumstances. The main options are being a sole trader or partnership; or setting up a company or limited liability partnership (“LLP”).

As a sole trader or partnership there is no legal separation between you and your business. However, with a company or LLP the business exists as a separate “legal entity” which is controlled by you but enters into contracts; takes on debts; pays taxes and so on in its own right.

The main advantages to a company or LLP are that you are not personally liable for the business’ debts; with clever accounting you may end up paying less tax; and it can add credibility to your business. However, they are more complicated to set up and run than doing business as a sole trader or partnership.

You should think about all the implications of the different legal structures rather than settling for one that is the easiest to set up or offers immediate advantages. You might be tempted to start out as a sole trader so you can get your business off the ground with the minimum of paperwork. However, this could backfire if things go wrong because you are personally responsible for the debts of the business. On the other hand if you decide to set up a company or LLP you need to consider whether you can cope with the heavy administrative burden involved.

Intellectual property

An exciting and catchy brand name, a new invention, creative media such as music, writing or graphic design are all examples of intellectual assets that you can protect legally. For many start ups and small businesses, these are the most important assets of the business. By legally protecting your intellectual assets you can stop other businesses copying your idea and make sure that only you can use your ideas for commercial gain.

In some cases you need to register your intellectual property through the Intellectual Property Office. This is so in the case of brand names (trademarks) and inventions (patents). However, with things like written text; computer programmes; artistic works and so on, copyright protection applies automatically as soon as you create the material in question. However, you still need to think about how you will prove that you had the idea first if someone breaches your copyright.

Of course, many businesses don’t have any intellectual assets that are worth protecting. In this case, you still need to check that you are not breaching someone else’s intellectual property rights. In particular, make sure that your name, promotional materials and so on are not in conflict with another business’ trademark. If someone takes action against you for infringement of intellectual property this could be costly in terms of legal fees and damages and in addition you might have to change the name of your business.

Red tape

Despite the current government’s “bonfire” of red tape, many people running a small business consider this the bane of their lives. You need to comply with a huge number of ever-changing official regulations that relate to all aspects of your business operations. Examples of regulated areas include taxes, insurance, and health and safety as well as more obscure areas like privacy and data protection, the environment, and export controls.

The Federation for Small Business provides guidance on complying with regulations. In addition, many solicitors offer a comprehensive “health check” service whereby they will check everything from “no smoking” signs to disabled access to make sure your business is compliant with regulations.

Most women setting up a small business don’t have access to a lot of money. However, there is no substitute for professional advice when it comes to the law. Consulting a qualified solicitor to get legal advice on your business operations is an excellent investment.  It will help make sure that your business is on a sound legal footing and give you peace of mind to focus on running and improving your business.

To find out more about starting and running a small business, you can visit Contact Law by clicking the logo below to learn about small business solicitors.



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