Consider Legal Issues Before You Start Your Small Business - dummies

Consider Legal Issues Before You Start Your Small Business

By Clive Rich

Part of Law for Small Business For Dummies Cheat Sheet

When you start on a long journey to somewhere new in your small or medium-size enterprise (SME), you need a map to follow. You need to consider some of the legal issues before you embark on that journey. At the initial stage of your small business, you have the following aspects in place:

  • An idea for a potentially scalable product/service idea with a big enough target market.

  • Some initial revenue models for how it can make money.

  • A business plan with milestones.

  • An idea of how much funding you need.

  • Initial core management (maybe only one or two people).

If you feel that don’t have the head-space to think about legal issues at this early stage, you may need to grow a bigger head! Here’s what you need to consider:

  • Reviewing your potential legal structure: Do you want to be a sole trader, a general partnership, a limited company or a limited liability partnership?

  • Checking Companies House and trademark and domain name registers: Search for competing trading names that may stop you using the name that you want.

  • Setting up your business structure: Implementing your decision as a sole trader/limited company/partnership structure. You also need to comply with formalities, such as registering your new enterprise with Companies House, filing resolutions and appointing directors.

  • Drawing up and entering into agreements: Shareholder and/or partnership ones.

  • Deciding what kind of external funding you require: Loans, equity funding from angels, crowd funding?

  • Raising funding: Plus closing the funding agreement(s) for your seed-funding round.