FAQs about Start-Up/Small Business Advice

SMALL BUSINESS FAQS – HAVERING SOLICITORS

I am looking at buying some products, but I am a little unsure about their legal status.  What should I look out for?

When concluding a contract, you should check out the nature of the organisation you are dealing with, whether that is a sole trader, partnership or company. If you are dealing with a company, you can access information about the company by contacting Companies House.  Some shady characters will change a company’s name several times to cover any bad reputations they have built up for themselves in the past.  However, they cannot change original registration number, so you should have an idea of who you are dealing with.  Although trust is important in business, it is always wise to ask for deposits or make credit checks to minimise the amount of risk you take on and ensure transactions are performed.

I am looking at starting a business, but I am a bit over-whelmed by the potential risks involved.  How can I reduce the amount of risk I take on?

Simply stated, there are three main ways of reducing the amount of risk you take on: by starting a partnership, a limited liability partnership or a limited company.  In a partnership, risk, in the absence of a partnership agreement, will be distributed equally amongst the partners.  Limited liability partnerships, whilst sharing features similar features to a traditional partnership, are subject to less risk as a distinct between the personal and business liability is made.  Partners are also not liable for other partners.  Companies differ in structure (in the sense shareholders own a slice of the company by virtue of their shareholdings) but the approach to liability and risk is generally the same.

Do I need to draft standard terms and conditions?

It is highly advisable to draft standard terms and conditions in order to ensure transactions with businesses and customers are governed on terms more favourable to you and less reliant on general standards of contract law.  You can, for example, retain ownership of goods until payment is accepted or restrict the amount your contractual liabilities.  However, when drafting terms and conditions, it is absolutely vital that you seek legal advice from a solicitor, particularly when dealing with consumers.  Consumers as well as businesses are protected by certain statutory guarantees (such as those in the Unfair Contractual Terms Act or the Sale of Goods Act) and will apply irrespective of the wording used in your terms.  You should also bear in mind that your terms and conditions need to be made available to customers at the point of sale, otherwise you may not be able to rely on them in court should a dispute arise.

Do I have to comply with health and safety laws?

It is absolutely vital that you do as health and safety fines can be very large indeed.  If you refer to the business audits page, you will find a health and safety check-list which you can use to ensure your business is on the right side of the law.  If you employ more than five people, you will need to produce a written statement, which should include procedures for fires, minimising fire risks and the process to follow should an accident occur.

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