There are a range of tasks you will be required to handle when you launch a business. It is crucial that you familiarise yourself with your legal obligations at this time, so you can establish a successful venture. Turner Little explains how to tackle key legal issues when starting your business.
Learn your obligations
Your legal rights and obligations depend on the structure you choose. Learn the differences between sole traders and limited companies, to familiarise yourself with your legal obligations. If you operate as a limited company for example, your personal financial assets will receive greater protection. But as a director, you will have certain responsibilities, such as completing the firm’s filing obligations. As a Company Registration Agent, Turner Little’s team can advise you on setting up limited companies.
Research insurance policies
It is also critical that you take out the appropriate insurance policies for your business, so you are covered in cases of accident. You are legally required to take out employer’s liability insurance, for instance, if you hire staff, even if you run your business from home. With this policy, you will be covered for costs if your staff claim compensation due to work-related illnesses or accidents.
It is also wise, but not a legal requirement, to take out public liability insurance. Under this policy, you will be covered if your customers or members of the public are injured as a result of your company, or on your premises. Finally, you should also consider taking out professional indemnity insurance. This is not legally required, but it is advisable. This insurance covers your business for providing insufficient advice, services or designs, helping you meet legal costs and any compensation.
Tax responsibilities
Remember to research your tax responsibilities when starting a business. HMRC conducts random investigations to ensure you are paying the correct tax for your business. It is key that you keep your firm’s accounts and tax records up to date, or these investigations could be lengthy and result in financial penalties. As part of our corporate services, Turner Little can handle key tax-related tasks for you, like preparing annual returns, This will make it easier for you to keep on top of your firm’s tax obligations.
You may also be required to register for VAT (Value Added Tax). You will have to pursue this course of action, if your firm’s annual profit eclipses the VAT threshold, which is currently £83,000. Remember that VAT is not linked to turnover. Therefore, you will have to consider this issue even if you are just setting up your business. If you think that your yearly sales will surpass the threshold, you must register VAT and charge the tax on all of the products and services you sell, or face the financial consequences.
Protect consumer data
Note that if you handle consumer information, your business will be required to protect this data, under the rules of the Data Protection Act. This covers details like names, addresses, medical records, banking details, ethnic backgrounds, political opinions, religious beliefs and criminal records. You must ensure that when this information is used by your firm, the consumer’s rights are not infringed.
If you do not comply with the Data Protection Act, you could incur financial penalties, while deliberate breaches can even be punished with imprisonment. Also if your firm does not safeguard private customer information, you damage your reputation. It is key that you invest in protection measures such as installing anti-virus software on business computers. You should also utilise password protection programmes like Last Pass, to shield critical consumer information from cyber-criminals.
Find expert advice
It is wise to seek expert advice, to ensure that your firm complies with all relevant laws, as there are a range of complex factors to consider. As Business Consultants, Turner Little can advise you in key areas, like filing vital documents, to help you handle your company’s legal obligations effectively.
Turner Little
Turner Little was founded in 1998 and it has since become a well-established UK based professional Company Registration Agent, Registered Bank Intermediaries and Business Consultants, as well as Trust provider. You can receive our monthly newsletter by signing up using the form below.