Though the law varies from country to country, the legalities of starting a business share some uniformity around the world. Largely, you want to be registered, pay the right tax, and have some cover if things go wrong. ‘Things going wrong’ can have a variety of different meanings, too. Small businesses have a lot of different risks to manage, from responsibilities to their employment, to cash flow and insurance policies.
The legal priorities businesses are held to are designed to protect both the businesses themselves and consumers throughout the life cycle of the business. That means that being legally compliant is an evolving process, and something that always has to be considered, rather than a set of one-time requirements. Here, we consider the standard legal to-dos of a small business, and how they apply throughout a given financial year.
The legal documentation for a small business falls into a few basic categories. Business law, employment laws, taxation, and health and safety are the fundamental legal pillars a business must abide by. In terms of actual documentation, fulfilling these obligations can be in the form of contracts, policies, forms, agreements, notices, and letters, each of which has a different legal significance.
Registering your business can work in different ways depending on where you’re setting up, but once done, you’ll be able to access a lot of official protections and coverage for both yourself and your enterprise. For example, if you’re offering a service centred around proprietary technology or processes designed by yourself, registering that as intellectual property or applying for patents means your unique offering is protected from imitation.
More basic agreements like premises contracts, declarations of partnerships, and financial arrangements are must-haves, allowing you to do business legally and transparently in your chosen location. If anyone attempts to breach the terms of an agreement or disputes something with your business, whether they’re a supplier, customer, or client, your registration of documents will be a major asset to your case.
Adding new employees to your team is a massive step for any small business owner. It means being able to start expanding your services and brand much further. However, employing people carries some obligations that must be met. Failing to meet those requirements is no laughing matter, and illegal employment can spell more than simply financial damage for an enterprise. Employment contracts are critical, and hiring a lawyer to assist in producing these is commonplace. In addition, you’re also going to need to have coverage for issues relating to disciplinary or grievance matters, as well as everyday HR matters.
Taxation is the cornerstone of running a business compliantly. Often, outsourcing taxation processes to accountants is an ideal route, since they can be complex and time-consuming for an inexperienced individual with an entire business to run on the side. However, keeping detailed records of statements, receipts, invoices, and historic returns are the sorts of things you can take responsibility for and will make the process of paying the correct amount of tax significantly easier for you.
Health And Safety
Failing to respond correctly to accidents or evidence of negligence can both result in serious fines for small businesses. For example, if an employee suffers an injury on your premises and is able to prove that your negligence resulted in that, any compensation for personal injury claims they file falls on your business. Avoiding these situations can include carrying out practices like risk assessments, visual safety aids for employees, written safety policies, and a clear incident reporting process in place.
Running a business isn’t easy at the best of times. Selling your products and services, finding a market fit, and making profits are the sorts of priorities owners want to focus on. That’s where your passion is, and the area of business that will drive your ambition forward. However, legal obligations exist for a reason. By protecting your business and those you work with, work for you and those you sell to, the legal to-dos help safeguard a fairer and just market for everyone. Without them, most of us wouldn’t be able to do business in the first place.