Setting up and running a business

How a business solicitor can help you

Deciding to start a business is exciting, but regulations can be complex so it’s important to get the right legal advice from the start.

Early advice from a business solicitor can:

• help prevent future legal problems
• protect your business
• save you money

Find a solicitor specialising in business

Financing and taxes

You may want to find out:

• what sources of finance are available
• what the legal implications are
• whether a lender’s terms are fair

Your solicitor will explain these areas and can even help negotiate finances on your behalf.

They can also advise on issues like the tax implications of different business models and the best time to start your financial year.

Goods and services

When buying or selling goods and services, it’s important to know what you can and cannot do legally. You might need to know:

• what contract terms could mean for your business
• how product liability could affect your business
• what you can and cannot say in adverts and promotional materials

A solicitor can cover all these points in detail and, if necessary, refer you to a specialist.

Cash flow

Your solicitor can help protect you against bad debts by:

• making sure you have the right contracts with customers and suppliers
• advising you about debt collecting
• taking legal action against people and companies who do not fulfil their contracts

Insurance

A business solicitor will give you independent advice on the risks you may need to insure against, such as:

• an employee being injured while working for you
• liability if your products or workers injure someone
• anything connected with your premises, assets and visitors
• being legally responsible for an employee who misuses the internet – for example, to illegally download music or video

Franchising

Buying a ready-made business is an appealing option, but you should be aware of any existing or previous liabilities that may come with it.

Make sure you read the small print to avoid being trapped in a deal with expensive products and no support from the franchiser.

Your solicitor can give you advice on all the common problems associated with running a franchise.

Premises

It’s important that you fully understand the terms of a business premises lease before you take it on. You should be clear about:

• whether the landlord can increase the rent and by how much
• service charges and how often these are increased
• whether you need planning permission to change the premises’ use

If you choose to run your business from home, you need to be aware of any restrictions.

Your solicitor can help you make informed decisions about where to run your business from.

Company structure

If you’re going into business with other people, you might need a shareholder or partnership arrangement to make sure you get a fair return for your financial or non-financial investment.

Your solicitor can explain the different options and advise on the best one for your partnership, limited company or limited liability partnership. They can even set it up for you.

Issuing shares

If your business is successful you may want to issue shares to people who would then own a share of the business (shareholders).

A solicitor can explain how your business can generate any additional investment that you may need to fund the growth or development of new products.

Protecting your interests

Running a business means you need to plan for events such as:

• what would happen if you fell out with a partner or shareholder
• whether you can be forced out of the business
• how to use a mediator to resolve disputes
• how to divide profits and responsibilities fairly
• making sure responsibilities and profits are divided fairly
• what would happen to your business and your assets if you became ill or died

Your solicitor can go over all these with you and advise how to protect your interests now and in the future.

Succession planning for family businesses

If you'd like members of your family to inherit your business after you die, you'd need to make a will.

Your solicitor can also help if you’d like to transfer ownership of your business before you die, for example if you retire.

Selling your business

If you decide to sell your business, your solicitor can help you by:

• drafting confidentiality agreements to make sure the information you're sharing about your business (prices, profits, customer lists) is not shared with anyone who does not need to know
• checking that there are no outstanding legal issues you’ll need to deal with in the future
• making sure your buyer is responsible for paying all contractors/suppliers after you sell your business

Solicitors play a key part in due diligence, a long and complex process where the business is investigated for issues such as:

• fraud
• outstanding legal issues
• whether all the information provided is correct before the business is sold

Find a solicitor specialising in business

Visit our Find a Solicitor website and search under "Company and Commercial".

Look for Lexcel – our quality mark in managing a legal practice. Firms that have achieved Lexcel commit to:

• effectively managing the risks in providing legal advice
• delivering consistent levels of advice and client service

Find out more about Lexcel

Free consultation for small/medium businesses

If you own a small or medium-sized business, we can put you in touch with a local solicitor who can talk you through your legal issues in a free 30-minute consultation.

Find out more about Lawyers For Your Business