Legislation affecting businesses has increased greatly over the past few years and it is absolutely essential that you understand any laws that could impact upon your business. It is also essential, if any law does affect your business, that you comply with it in full. Remember, ignorance of the law is no excuse.It would be impossible to give even a brief outline of the legislation that could impact upon all businesses. This is where you will need specific advice for the type of business that you are establishing. Chapter 5 will give you details of some of the business support organisations that can help you in this respect.In this chapter we will look at some of the legislation that will affect all businesses. This will include the different forms of business that you can start, together with the basic requirements of the Inland Revenue for tax and National Insurance, and HM Customs and Excise for VAT registration and payment. We will also look at how you can protect your business using the legislation covering patents, trademarks and copyright.
A Word Of Warning To Start This Chapter
In recent years there have been a number of scams regarding legislation issues operated on the unwary new business. In some cases experienced entrepreneurs have even been caught out by the unscrupulous.
At the time of writing there are at least two scams being operated regarding:
- fake Health and Safety registration agencies
- fake Data Protection Act registration agencies.
Fake Health And Safety Registration Agencies
The Office of Fair Trading have issued warnings against a number of fake agencies and advised that any demand for payment should be ignored and reported in order that they can take appropriate action. These agencies include:
- Health and Safety Enforcement Agency (HSEA)
- Health and Safety Compliance Agency (HSCA)
- Health and Safety Registration Enforcement Division (HSRED)
The advice from the ‘real’ Health and Safety Executive (HSE) is that they never write to firms seeking advance payment for any services which it has not provided. If you receive any correspondence regarding health and safety matters then contact your local HSE office before making any payment.
Fake Data Protection Act Registration Agencies
Businesses are receiving letters and demands for payment from unofficial companies offering Data Protection registration services.
The advice from the Data Protection Comissioner’s office is that if you are unsure whether you need to register, or you need information or help with registration, then you should contact them. There is absolutely no need to use the services of an agency.
There are bound to be variations on these scams and if you are in any doubt as to their authenticity you are strongly advised to make
enquiries with a business support organisation, for example Business Link, before you part with any money.
The Different Forms Of Business
There are a number of different forms that a business can take and there is no prescriptive method by which you can decide which one is right for you. Whilst there are other options, most new businesses start in one of three forms:
- sole trader
- partnership
- limited company.
Sole Trader
This is the simplest way of starting a business with very few formalities. You will need to advise the Inland Revenue that you are self-employed for tax and National Insurance contributions. They will provide the relevant guidance booklet and notification form upon request.
Control of the business will be entirely yours and you will be responsible for all management decisions. You will, however, also be personally responsible for any debts that you incur and, should your business fail, any personal assets that you have can be seized and sold to repay those debts.
On the plus side, any profits that you make will belong to you. Moreover, whilst you have a responsibility to maintain proper
accounting records for tax and VAT purposes, any records that you keep are not available for public inspection.