Starting a Business

Business Start Up Advice

Business Plan

The first step when you are starting a business is to create a business plan. This is particularly important if you plan to seek investments from potential investors. A business plan can be as simple as you want, however the more detail you add the stronger it will appear to investors.
As a starting point your business plan should include:

  • A description of your business.
  • An outline of the goods/services your business will provide and what demographic and market this will appeal to.
  • Finally you should detail your desired investment terms.

Naming Your Business

The next step in starting your business should be to consider names for your business. This can often be quite a time consuming step as finding the right name for your business that adequately describes what you do and is still available is not easy.
Domain names

If you wish to set up as a sole trader then your main consideration will be whether the name you have chosen is available as a domain name. You should seek out .com and domains as these will typically draw more traffic to your site.

Companies House

If you wish to set up as a limited company then you also need to consider whether your desired name is still available on companies house, if it is then registering on companies house will give you protection from preventing anyone else from registering your name as a LTD company.

Once you have established the basics it is also necessary to be aware of your on-going responsibilities which will vary depending on your business structure.

As a Sole Trader

You must:

  • Send a self-assessment tax return every year.
  • Pay income tax on the profits you make.
  • Pay National Insurance.
  • Register for VAT if you expect your turnover to be more than £77,000 / year.

In Partnership

  • The nominated partner must send a partnership self-assessment tax return every year.
  • All partners must send a self-assessment tax return every year.
  • All partners must pay income tax on the profits you make.
  • All partners must pay National Insurance.
  • The partnership must register for VAT if it expects turnover to be more than £77,000 / year.

As a Private Limited Company

The company has on-going reporting and filing responsibilities in each financial year.
The company must register for VAT if it expects turnover to be more than £77,000 a year.
Directors must send in a self-assessment tax return each year and pay tax and National Insurance through the PAYE system if the company pays them a salary.

As a Limited Liability Partnership (LLP)

  • The partnership must send a partnership self-assessment form to HMRC each year.
  • All partners must send a self-assessment tax return every year.
  • All partners must pay income tax on the profits you make.
  • All partners must pay National Insurance.
  • The partnership must register for VAT if it expects turnover to be more than £77,000 / year.

What Structure to use?

In order to decide which structure to choose it is important to weigh up the pros and cons based upon your individual circumstances. Important questions to ask yourself should be:

Do I want my finances to be separate from the business?
Am I willing to devote time to setting up a company or LLP and dealing with the extra administration involved in running it?
Am I comfortable with financial information about my business becoming public (i.e. filed at Companies House) if I go down the company or LLP route?
Will my business be seen as more professional or established if it is a company or LLP which is registered and regulated by Companies House?


Insurance is a protection against damage and loss and is imperative for any business to mitigate risk.
In order to decide what insurance cover you need for your business you must first consider what risks your business is exposed to and balance this against the cost of insurance.
Insurance is important no matter what trade you are in and is definitely worth considering as it can give you peace of mind so that if the worst does happen, your insurers will help you get back into business as quickly as possible.
Typical insurance policies can vary and include:
Employers’ liability – all employers of staff based in England and Wales must, by law, purchase Employer’s liability insurance coverage of at least £5 million. This will pay out if an employee suffers personal injury at work.

Public and product liability – this type of insurance is also common most policies will provide indemnity cover of £2 million, which can be extended to £5 million for the majority of trades, including cover for personal liability of employees and directors in the UK.

Temporary employees – up to five temporary employees (including sub contractors).

Legal protection – to protect you in case a customer sues you; this sometimes includes cover for contractual disputes and debt recovery.

Money – if it gets stolen on your business premises or in transit.

Assault – compensation for death or injury to an employee as a result of an assault.

Many business insurance policies also offer, as additional paid-for options:

Property damage – accidental loss or damage of equipment, stock and tools.
Contract works – for construction works, material and plant.
Business interruption – increased loss of income (but normally unavailable for the construction trades).
Legal and Contractual Considerations
Contracts are a key part of any business. Certain contracts must be in writing but most day to day contracts, including those for the sale of goods and services, can be made verbally.

However, to protect you and your customers, it’s much better to make sure you conduct your business using watertight and legally-binding written agreements.

Why use standard terms and conditions?
Reasons to use standard terms and conditions include:

making everyone aware of their rights and obligations from the outset.
allowing the parties to focus their energy on agreeing the specifics of a particular order.
comfort that you are contracting on terms you can comply with.
makes it easier for your employees to conclude contracts.

What they cover
The standard terms will apply to every order or transaction you undertake. They should cover all the topics that apply to all your transactions, including:

  • how a contract is formed
  • payment terms
  • how delivery will take place
  • your policy on returns and refunds
  • your position on defective goods or services
  • your liability.

The specifics of the transaction will be set out in an order and will include:

  • a description of the goods or services
  • the price
  • any other terms specific to the transaction.

You must make sure your standard terms apply to all orders
For the terms to be legally binding and apply to your orders, you must bring them to the attention of your customers before an order is made.

It is no use relying on terms printed on the back of your invoice after the goods or services have been provided. You should include a copy of your standard terms in any:

  • quotations
  • brochures
  • order confirmations
  • delivery notes.

If you are conducting business via a website, you will need to ensure customers agree to the terms before placing an order, preferably by clicking an “I agree” button.
Particular rules apply to standard terms

The position here depends on whether you are dealing with another business or a consumer and whether you are selling goods/services via a website.
When a business deals with an individual consumer, certain terms will be included by law in the agreement and cannot be excluded. These terms are often referred to as a consumer’s “statutory rights.”
If you are selling to consumers via a website, further considerations come into play, including a right to return goods within seven days for any reason.
If you are dealing with a consumer, it’s also much more difficult for you to exclude or limit your liability if something goes wrong.
When a business deals with another business, there is more scope for excluding statutory terms and for limiting or excluding liability but care must still be taken.
Business Records
HMRC may wish to inspect your business records to ensure that:

  • the business is paying sufficient tax
  • staff are receiving their wages
  • National Insurance contributions are being properly made
  • the business is not being used for money laundering purposes.

Why do I need to keep records?

The key requirement of an accounting system is permanence.
You are not allowed make business records in a form where they can be erased or changed.
All accounting and bookkeeping rules are based around a systemic requirement to:

  • record transactions when they happen; and then
  • during the relevant accounting period, classify and reconcile transactions to show how much the business has received for each and every recorded transaction during that accounting period.

If the business can be shown to be making a profit within that accounting period, then it may have to pay tax on the accumulated profit earned.

Business Stationary

Whether in hard copy, electronic or any other form:
A company must state its name, in legible lettering, on the following –

  • all the company’s business letters, order forms;
  • all its notices and other official publications;
  • all bills of exchange, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed by, or on behalf of, the company;
  • all its bills of parcels, invoices, receipts and letters of credit
  • on all its websites

On all of its business letters, order forms or any of the company’s web sites, the company must show in legible lettering –

  • its place of registration
  • registered number
  • its registered office address
  • and if it is being wound up, that fact,

Whenever an email is used where its paper equivalent would be caught by the stationery requirements then that email is also subject to the requirements. The above also applies to Limited Liability Partnerships.
Working From Home

Nothing could be simpler but you should still check that your mortgage allows you to do this and notify your insurance company, as this may be viewed as a change of use.
Special trades Certain businesses, including:

  • places serving food
  • hotels
  • pubs
  • businesses selling or looking after animals
  • betting shops
  • hairdressers

have separate regulations relating to their premises and/or need a special licence to trade. Contact your local Planning Department for more information.
Trading laws A large number of trading laws apply to trading in the UK, at least some of which are likely to apply to you and which include:

  • The Consumer Credit Act 1974 (controls consumer credit and hire)
  • Consumer Protection Act 1987 (controls the supply of consumer goods)
  • Food Safety Act 1990 (controls and maintains food standards)
  • Trade Descriptions Act 1968 (prohibits misdescription of goods)
  • Trade Marks Act 1994 (prohibits the fraudulent use of a trade mark)
  • Weights and Measures Act 1985 (protects against deficient quantity in sale of goods)


Prime Lawyer
83 Ducie Street,
Manchester, M1 2JQ
Company number: 08711980
P: 0800 170 0518

Ask us a Question

About Us

Prime Lawyer is a leading provider of legal document creation and Will writing services and in order to maintain our reputation all our staff are highly trained in legal document creation and Will writing services. We also have professional indemnity insurance in relation to our Will writing services so you can rest assured you are in safe hands with us.