So, you’re starting a business—congratulations! You’ve got your big idea, a catchy name, and maybe even a logo that screams “future billionaire.” Before you dive headfirst into your entrepreneurial dream, let’s talk about something less glamorous but absolutely vital: the legal stuff. Think of it as the sturdy scaffolding holding your shiny business skyscraper together. Skip it, and things can come crashing down faster than you can say “limited liability.”

Here’s our simple guide to the legal essentials you need to consider and why you shouldn’t ignore them.

1. Choosing the right business structure

Imagine this: you’ve been running your coffee shop for six months. Business is booming until someone trips on a loose floorboard, breaks their wrist and pursues a personal injury claim against you. You realise all your personal savings are now on the line. Why? You didn’t set up your business as a limited company .

When starting up, you’ll need to decide whether to operate as a sole trader , a partnership , or a limited company . Each has its pros and cons:

• Sole trader: simple, but you’re personally liable for debts
• Partnership: share responsibility with others, but choose your partners wisely—no one wants to be stuck in a “business marriage” with a friend who suddenly decides to quit
• Limited company: offers limited liability, which means your personal assets (like your house) are safer if things take a turn for the worse

2. Registering with HMRC

Picture this: you’ve been selling your handmade jewellery online for a year and suddenly get a letter from HMRC. It seems that you never registered with HMRC for tax. Now you owe penalties, and you’re Googling “what happens if you ignore HMRC” (spoiler: don’t).

Whether it’s income tax, corporation tax, or VAT, registering with HM Revenue & Customs is non-negotiable. Make sure you stay on top of deadlines to avoid fines or unwanted surprise audits.

3. Contracts: the shields of the business world

Ever hear the story of two friends who launched a startup and fell out because they never agreed who owned what? One walked away with the intellectual property, leaving the other high and dry. Moral of the story - get everything in writing.

Whether it’s with suppliers, customers, or business partners, a well-drafted contract clarifies expectations, protects your interests, and can save you from legal battles later. Even for “friendly deals,” a handshake isn’t enough. Consult a solicitor to get your company documentation, terms of business and all other contracts set up properly.

4. Employment law: protecting you and your team

Thinking of hiring staff? Fantastic! But remember, with great power comes great responsibility. Failing to provide a written employment contract, paying below the minimum wage, or skipping health and safety measures can land you in hot water.

Here’s a classic blunder: A startup hires a friend on a casual basis but doesn’t set out clear terms. Months later, the friend claims they’re entitled to holiday pay and a pension. Guess what? They might be right.

By complying with employment laws, you protect both your team and your business. It’s also the right thing to do—happy employees make for a stronger business.

5. Intellectual property: don’t let your ideas get “borrowed”

Imagine this: you’ve spent months developing your brand, only to discover a rival business is using a name suspiciously similar to yours. Worse, they’ve trademarked it!

To avoid this nightmare:

• Trademark your brand name and logo
• Copyright your content, like blog posts, product designs, or software
• Patent any unique inventions (if you’ve created the next Dyson vacuum, this is non-negotiable)

Protecting your intellectual property ensures your hard work isn’t stolen or duplicated.

6. Data protection and privacy

Data breaches aren’t just for big corporations. If you’re collecting customer data (even email addresses), you need to comply with GDPR (General Data Protection Regulation). Failure to do so can result in hefty fines.

For instance, a small retailer once accidentally sent customer details to the wrong mailing list. It wasn’t malicious, but it still cost them their reputation—and money. Invest in secure systems and always get consent before collecting personal data.

7. Licensing and permits

Think your business doesn’t need any licenses? Think again. Whether you’re opening a café (food hygiene), running an event (alcohol and music), or operating online (consumer protection laws), there’s likely a permit with your name on it.

Skipping this step could lead to fines—or even being shut down entirely. A small investment in compliance now can save you big headaches later.

The bottom line

Running a business is exciting, but ignoring the legal practicalities is like building on quicksand. It might hold for a while, but when things go wrong (and they often do), the consequences can be devastating.

By tackling these legal aspects early, you’re setting your business up for success. Whether it’s registering trademarks or drafting contracts, an experienced buisness solicitor can help navigate the complexities, demystify the jargon and help you build a solid foundation for the future.

For advice and assistance, contact Sarah Naylor on 01302 320621 or at sarah.naylor@switalskis.com. We’re here to help with all your business needs.