1. Don’t put your personal assets at risk.
If you are starting a business with one or more people, you can choose partnership, limited liability partnership or limited company status. Remember that in a partnership, all partners are jointly liable for debts – if you come up against a legal problem, you will be risking your personal assets.
2. Put it in writing
Ensure that all your business deals and agreements are confirmed in writing. If you strike an agreement verbally, get a confirmation in writing as anything that is agreed verbally is often difficult, if not impossible to put into effect, if problems arise. A written record will also prevent people from trying to change their minds or giving you a different story at a later stage.
3. It pays to get advice early on
The amount you will pay for advice at an early stage can be substantially lower than paying for problems that will arise in the long-term. Ask for an estimate of the cost if you seek a lawyer’s advice. Some solicitors will offer a package price for jobs like forming a company.
4. Get someone to recommend a solicitor
There are many different types of law and solicitors who specialise in certain areas, so finding one can be a daunting task. Recommendations from other companies is a good way to start. Don’t be afraid to ask a solicitor for references or testimonials from any other companies it has worked with, and follow these up.
5. Don’t take risks with health and safety
By law, all businesses need to assess potential risks in the workplace – health and safety fines can be hefty and can cripple your business. Only firms with fewer than five people are not required to come up with a written statement. Your statement should address the following issues: what to do in the event of a fire and the procedure for reporting and dealing with accidents.
6. Spell out your terms and conditions
Make sure all your customers are aware of your terms and conditions, otherwise you will risk being paid when they feel like it, and sometimes not at all, if they go bust. You will also need to ensure that your customers agree to these terms and that they are aware of them each time an order is placed.
7. Keep up to date with changes in the law
Employment law is one area that is constantly changing so it’s important that you keep up-to-date. Every employer must provide a statement of employment, clearly laying down certain details, and it can be in your interests to include policies that are not needed by law, but that would be beneficial.
8. Keep employment contracts clear and simple
The way you word a contract of employment is also important – it needs to be as clear and easy to understand as possible. Keep the sentences short and to the point – no employer is expected to be an expert in employment law.
9. Shop around for insurance
Not only do you want the right kind, you also want it at the right price and with the right company. Consider using an insurance broker to help you with your search but shop around and get at least three quotes. Or try asking business contacts to see if they can recommend anyone.
10. Avoid expensive mistakes – protect your intellectual property
If you have created a new product or service, do a patent search and a trademark search to avoid possible conflict with an existing product or patent. Having to rename or relaunch your product will not enhance your reputation.