Legal Business Structure
Starting up a business can be hard and takes motivation, talent, research and planning.
Whilst setting up a business can be an exciting time, without the right legal advice it can become a legal minefield. At Jeffrey Mills Solicitors we believe prevention is better than cure. We can help you to protect your business from risk and save money by helping you identify future legal problems and advise you on what steps to take to prevent other problems from arising.
Jeffrey Mills Solicitors can advise you on the qualities of any of the following (to name a few):
If you start working for yourself you are classed as a self-employed sole trader, even if you have not told HM Revenue and Customs (HMRC) straight away.
‘Sole trader’ means you are responsible for your business, not that you work alone, and can therefore employ staff. You run your own business as an individual and can keep all business profits after tax has been paid.
Made up of members (people or organisation who own shares), it is the Directors who are responsible for running the company. (Directors do not have to own shares).
A limited company runs your business and takes responsibility for everything it does, separating its finances from your own. Any profit made by the company, after it pays Corporation Tax, and is shared.
An ‘ordinary’ business partnership sees all partners sharing responsibilities for the business, sharing all profits and being taxed on their share.
‘Limited’ Partnerships and ‘Limited Liability’ Partnerships are made up of partners who can all share profits, and each pays tax on their share. However, liability for debts that cannot be paid in a limited partnership is split among partners, whilst Limited Liability partners are not personally liable for debts the business cannot pay (limited to the amount they invest in the business).
There are no statutory regulations for franchises as they are regulated under the General Law. They must take into account:
- Data Protection
- Unfair Contract Terms
- Sales Agency Regulations
- Transfer of Employees
When looking for a company to franchise you should look for one that is a member of the British Franchise Association. This is an organisation for ethical franchises in the United Kingdom.
Set up through an agreement between a group of people who come together for another reason than to create a profit e.g. sports clubs, voluntary group. If profit is made, corporation tax has to be paid and a company tax return filed in the same way as a limited company.
Company structure and formation of a company
What you do depends on the type of business, if you are VAT registered and if you employ people.
Generally company rules dictate that directors of companies are responsible for the day-to-day management and make most of the decisions, with only a few matters (such as changes to the company’s share capital, or to its articles) having to be referred back to the shareholders for a decision.
All rules can be amended but generally shareholders have few rights. They can, however, intervene; the most common reason being to appoint and remove directors, which often has to be met with a majority vote. A minority shareholder only has limited power to block shareholder decisions.
If you are thinking of starting your own business and require further details then call Beacon Wealth Legal.
* all data correct at time of printing