Starting a business is both exciting and challenging. To ensure a smooth launch it’s critical to address the legal aspects from the get-go.
Our legal checklist is designed to guide you through the essential steps, from structuring your business to protecting your data, setting you on a path to success.
1. Structuring Your Business
Structuring your startup correctly is fundamental, impacting your business’s day-to-day operations and long-term sustainability.
Selecting the right business structure safeguards your interests but also facilitates a fantastic environment for growth and success.
Available options for structuring your startup:
Sole Traders: This simple structure grants full control over the business to a single individual, but comes with unlimited personal liability for business debts and obligations.
Partnerships: This option allows for the sharing of responsibilities and profits between two or more people. While it fosters collaboration, it can also potentially lead to disputes, and partners have unlimited liability, much like sole traders.
Limited Companies (Ltd): This structure is a separate legal entity from its owners, providing them with protection from personal liability. However, it requires adherence to strict reporting and regulatory compliances overseen by Companies House.
Limited Liability Partnerships (LLPs): This option combines the features of partnerships and limited companies, granting liability protection to its partners while allowing for operational flexibility. It offers a more formalised structure with benefits in terms of tax and personal liability protection.
Learn more about the pros and cons of a sole trader and a limited company here.
Top Tip: It is strongly advised that businesses with multiple shareholders have a shareholders’ agreements in place to avoid potential disputes.
2. Building Your Team
Employees will be the backbone of your business. Ensure you safeguard your business against potential disputes and legal difficulties.
An employment solicitor will support you with:
- Drafting employment contracts
- Workplace policies
- Compliance
- Grievances
- Health and safety policies
- Data protection
- Staff handbook
Get these right at the very beginning for a seamless launch into business life.
3. Key Business Contracts
Shield your business from potential pitfalls through a range of contracts including:
Shareholders’ Agreements: This agreement dictates how the company should be operated and outlines the shareholders’ rights and obligations.
Partnership Agreements: If the business is a partnership, this agreement outlines how profits and losses are shared and how business decisions are made.
Consultant Agreements: Contracts outlining the scope of work, payment terms, and confidentiality terms for consultants or freelancers.
Non-Disclosure Agreements (NDAs): Contracts to protect confidential information, especially during negotiations or collaborations.
Commercial Lease Agreements: If the business rents a physical location, a lease agreement defines the terms and conditions of the rental space.
Terms and Conditions: The terms and conditions serve as a legal contract between the business and its customers, detailing the use of its products or services. This comprehensive document, typically found on the company’s website, covers everything from payment terms and delivery processes to return policies and warranty information, ensuring both parties understand their rights, obligations, and the procedures for resolving disputes.
Data Processing Agreements: Agreements outlining how personal data is handled – crucial for compliance with data protection laws such as UK GDPR.
Supply and Distribution Agreements: Contracts defining the terms and conditions under which products are supplied or distributed.
Privacy Policy: Detailed policy explaining how the business collects, uses, and protects customer data.
Exit Agreement: Planning for potential exits, including the sale of the business or other forms of dissolution.
4. Upholding Data Protection
In the digital age, safeguarding personal data is non-negotiable. Comply with legal obligations by registering with the Information Commissioner’s Office and establishing a privacy policy for your website, amongst other measures, to guarantee data security and foster trust with your clients. Rubric can advise on what is needed here.
Are you starting a business?
Rubric can help lay down the legal foundations for success, growth and minimised risks.
0117 435 4350 | info@rubric.law
