Stanley Saffer, Consultant Solicitor
Stanley is a senior solicitor with extensive experience in corporate work, litigation, and property law. Formerly an equity partner and managing partner at Trott & Gentry, he now consults on commercial, property, and dispute matters at McAllister Olivarius.
You are ready to start your business; you have found premises; you have a great idea; you have planned your budget, and you are about to interview people for the jobs you are about to create.
You have even managed to put together a feasible budget and business plan because the bank has given you initial support by way of a line of credit (but beware as to how that is secured…)
Having come so far, how do you choose the right commercial vehicle to trade under?
Choosing the right commercial vehicle
The options include:
- Sole trader
- Partnership and percentage shares
- Limited liability company
- Private limited company
Having thought of the above, you will need to decide:
- What kind of lease of premises
- Cost of equipment
- Level of salaries
- Is the bank being as helpful as it could be
Other considerations:
- Do you need a licence to operate?
- Are there health and safety considerations for your business?
- Do you understand the terms of your lease?
Many professionals and specialists prefer to go into a new business venture initially as a partnership. If so, they would need a partnership deed to regulate matters between them and define their responsibilities. But this is changing. Many now go straight to a limited company, but again, there needs to be directors’ agreements and possibly shareholders’ agreements.
Besides this, you and your business partners will be kept busy considering the following:
- Decisions concerning partners and /or directors’ salaries and the responsibilities that each person takes on.
- As a new business, you have to make sure that you understand the rules of trade in which you are to do business.
- You will need to be aware not just of your initial responsibilities but of your future and ongoing liabilities. Because if things do not go well, you cannot just shut up shop and walk away.
- What issues and claims can you insure against? (However, insurance may not be the answer to everything…)
- Investment into office and business equipment. Lease or buy? Second-hand or new?
- What do you call your business? Be aware of possible breaches of intellectual property and copyright.
- Be aware of long-term contracts and franchise agreements.
You will also need to think of the people you will need to advise you on a regular (but not full-time) basis, including a lawyer, accountant, health and safety specialist, and HR/personnel department. ALWAYS READ THE SMALL PRINT, and if it’s not clear or you have questions, consult your lawyer.
Whether you are launching a start-up or running an established business, our team provides expert advice across the full spectrum of corporate and commercial law. Get in touch today for a free initial consultation.