Starting a new business can be incredibly exciting as well as very, very time consuming. Now if you’re a new business owner, one of the things that’s very easy to overlook are your legal obligations as a business owner and indeed an Entrepreneur.
Now, failing to protect your business legally can actually result in you getting a lot of penalties, or indeed getting fined and ultimately leading to the premature closing of your business.
In this article, I will be sharing with some things you must do legally to ensure that your business remains protected.
WATCH THE VIDEO: Things You Must Do After Starting A UK Business
- Decide on Legal Structure
The first thing you must do is to decide on the legal structure of your business. Now, depending on the legal structure you’ve chosen will determine what records and accounts you actually need to keep and/or file to Companies House.
It will also determine how much you have to pay in terms of National Insurance and in terms of your tax liabilities as a business owner.
It’s also important to bear in mind that some of the most common legal structures that we generally tend to see a lot of UK business owners register their businesses under fall under sole traders, limited liability partnerships, and indeed limited company structures.
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- Employers’ Liability Insurance
Now the second thing you must ensure you do in order to protect your business legally is to ensure that you have Employers Liability Insurance. Now this is a type of insurance that all employers with employees must have in place.
This is an insurance that is there to actually protect you from any liability claims that an employee might potentially have against you in the event of whether they have a severe illness, or indeed they have an accident whilst working for you.
- Pre-employment Checks
Now the third thing you must do to ensure that your business remains legally protected in the UK is to ensure that you have in place relevant pre employment checks.
Now every employer in the UK must ensure that any employee that they are hiring to work for them has the relevant right to work in the UK.
So this is going to form part of your pre employment checks.
Now depending on what sector it is your business actually falls in – you might also have to have in place a criminal records check, also sometimes known as a DBS check.
Failing to have these checks in place can actually result in you having a penalty against you for your business.
- Contract of Employment
Now the next thing you need to have in place to ensure your business stays protected legally is to have in place a contract of employment.
Now as a rule, if you’re going to hire someone and they’re going to be with your company for any period longer than one month, then you must have a statement of employment for that particular employee.
That particular contract will usually have in place the terms and conditions of the contract, the working hours and indeed what the payment is.
Whether indeed, you’re going to be paying them a salary on a monthly basis or an annual basis. This will all have the details included in the contract of employment.
- Health & Safety
The next thing you must do to ensure that your business remains legally protected is to consider health and safety.
Now as a general rule, you must make sure that you are providing a safe environment in which all your employees can work.
Also, if you’re going to be hiring more than 5 staff, then you must have in place or written formal health and safety policy.
You must ensure that you have this well documented and that ideally it is visible and all your staff are aware about all your policies that you have as part of running your business.
- National Minimum Wage
There is a national minimum wage for all employees in the UK and you must ensure that as business that’s hiring employees, all your employees are getting paid as a minimum, what’s known as the national minimum wage.
It’s important to note that this changes on a yearly basis, so it’s important to ensure that you keep track of what the annual national minimum wage is and that this is reflected in the salary and wages you pay to your employees and staff.
The rate you pay for national minimum wage will also depend on whether or not your employees are apprentices, or other categories of staff, and their age.
So it’s important to ensure that you keep up to date with relevant new national minimum wages to ensure that you’re paying your employees according to how they need to be paid legally.
- Not Registering with HMRC
One of the biggest mistakes a lot of business owners typically make is not registering their company with HMRC as an employer that’s looking to hire employees.
As an entrepreneur, if you are looking to employ people to work for you as employees within your business, you need to ensure that you’ve registered as an employer with HMRC .
Within the first month of hiring your staff, it’s your legal duty as an Employer to pay over any tax deductions as well as national insurance contributions to HMRC.
Now these are just some of the ways that you can protect your business legally. Also, I would always advise that you seek legal professional help if you’re unsure of other things that you need to do to help you maintain the legal protection your business.
