Bromley Solicitors

BROMLEY SOLICITORS SMALL BUSINESS TIPS AND ANSWERS TO FAQS

Bromley Start-up/Small Business FAQs

How do I start a business?

To start the simplest type of business (a sole tradership), there are no formal legal requirements.  The same goes for partnerships.  However, you should bear in mind that in both a sole tradership and a partnership, you will be personally liable for debts and other obligations, although in the case of a partnership you will be jointly and severally liable with other partners.  The safest way to start a business is to start a company.  You will not be personally liable for the company’s debts unless you engage in ‘reckless trading’.  Whilst it is relatively easy to start a company (see below), companies are tightly regulated by several Companies Acts which you will need to comply with at all times.

Do I need to draft business terms and conditions?

Yes, you should have your terms and conditions drafted by a professional solicitor.  If you do not have your own terms and conditions, any goods or services you provide will be governed by normal contractual standards.  If, for example, you sell some goods to a customer, under normal contractual principles, ownership will pass at the point you hand the goods over.  If you were to draft your own terms and condition, you could retain ownership of the goods until you receive payment from the customer.

What else should I bear in mind with terms and conditions?

You need to make sure your customers or suppliers are able to see your terms and conditions before any transaction.  If you are running an online business, it is especially important that your terms and conditions are visible before the point of purchase.  You must also remember that you cannot simply opt out of consumer laws and regulations and your ability to strict your liability is governed by several Acts, such as the Unfair Contractual Terms Acts.

How long does it start to take a company?

If you make an electronic application, it is possible to have a company incorporated in the same day, making the United Kingdom one of the fastest places in the world.

What do I need to incorporate a company?

You should draft your own articles of association, otherwise the Companies Act 2006 will automatically include default articles in your application.  Also bear in mind that the Companies Act provides a minimum level of standards, so where your articles do not meet these standards, terms from the Companies Act will be implied into your articles.  You also need a Memorandum which is signed in the presence of a witness.  Lastly, form IN01 will have to be filled in.  This form includes details of directors, the company’s initial capital and the details of the office at which you register which will be entered into your company’s registers that you will be required to maintain and update.

I am thinking of importing some merchandise from China.  What things should I bear in mind?

Frankly speaking, importing goods from outside the European Union is not always simple and where possible you should seek professional legal advice.  However, with that said, you should first consider the goods themselves.  Can you legally import them into the UK?  Some foods, plants and flowers are restricted altogether, so always double check.  Other goods may require an import license.

I am a little bit unsure about an overseas supplier.  What can I do to minimise risk?

Where possible, it is best to try and use a trusted supplier to minimise any risks.  If you are unsure, however, you could use a letter of credit to ensure you receive the goods.  A letter of credit is a type of payment mechanism frequently used in international trade where your bank will pay the supplier upon the receipt of certain documents including a commercial invoice, a bill of lading and shipping insurance documents.

For additional small business legal advice in Bromley, please click here.