Laws and regulations your new business needs to know (and follow)

27 July 2015 Kieron Johnson

Starting out in business is an exciting time. But inside every blessing lies a burden. And that burden often comes in the shape of having to get to grips with all the laws and regulations that apply to your new business. Whilst you don’t need to be Rumpole of the Bailey to understand them, you do need to know that ignorance of the law is no defence. So, pay close attention to keep your business on the right side of the law.

Coming up with a good idea for a business and producing an immaculate business plan are only half the battle. ‘Good’ business ideas are 10 a penny and a business plan is only ever as good as its execution.

The real challenge comes when navigating your way through the myriad of rules and regulations that will affect your new business. Failing to live by the letter of the law can cost your firm financially, even if the transgression is unintentional (fines aren’t your friends).

Consider this lesson ‘small business law 101.’

If you’re about to start a business, the prospect of complying with every law and regulation may be a daunting one. But a lot will depend on your business venture. Some businesses are more regulated than others. Getting your head around the essentials early on can save you an awful headache later.

Licence and registration (please)

No, we’re not on about you being pulled over by the ‘boys in blue.’ We’re talking about business.

Depending on the business you want to start, you may need to apply for a licence from your local authority. Examples include:

  • Taxi companies: earlier this year, former Southam councillor, David Wise, found this out the hard way. He was ordered to pay almost £32,000 following a conviction for running a private taxi hire service without a licence.
  • Pet shops.
  • Hotels.
  • Restaurants: late last year, a restaurant owner was handed a £2,000 fine for running a takeaway business without a licence.
  • Drinking establishments.

Licences aside, if, for instance, you plan to open a childminding business or day-care nursery, you must register with the Office for Standards in Education (Ofsted).

Health and safety

alt The Health and Safety brigade are never out in force more than in the workplace, so beware.

As a business owner, the buck stops with you when it comes to the health and safety of your staff, customers and visitors on your premises.

Health and safety legislation also applies to the self-employed who work individually or with staff. Earlier this month, the Health and Safety Executive (HSE) fined a window cleaning company and its director for failing to put appropriate safety measures in place when employed to clean the windows of a nursing home.

If your business works with dangerous or hazardous materials or substances, such as asbestos, a local authority licence may be in order. Alternatively, you may be required to inform the environmental health department of your local authority or the HSE.

Is your property intellectual?

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One thing is guaranteed. All businesses have some intellectual property (IP), including yours.

IP can be a copyright, trademark or patent and may vest in a trade name, logo or a special process.

First thing’s first. Alongside an IP solicitor, trademark or patent attorney, you should conduct a thorough audit of your business to decide what needs to be protected, how and when.

One caveat though. Most IP rights are protected on a jurisdiction-by-jurisdiction basis. So, having IP protection in the UK doesn’t mean you’re automatically protected elsewhere in Europe or the rest of the world.

For more information, the Intellectual Property Office is the place to go for start-ups.

Does your insurance mean business?

Taking out business insurance is like wearing a seat belt.

Statistically, you probably won’t be involved in a car crash but, if you are, you’ll likely live to see another day if you’re wearing one. It’s the same with business insurance cover.

While some insurance is mandatory, others are optional. Employers’ liability insurance, which protects against employee claims for accidents and illness at work, is compulsory.

However, professional indemnity insurance, which protects against legal action from clients who claim to have received poor advice, is only compulsory for providers of professional advisory services, such as lawyers and accountants.

And motor insurance, which protects against claims made in road traffic accidents, is compulsory for businesses that use vehicles.

Other forms of insurance cover you may want to consider include:

  • Buildings and contents insurance.
  • Business interruption insurance.
  • Key person insurance (protects against loss in the event of the absence of the owner-manager of the business).
  • Product liability insurance.

Waste not, want not

Even if your business won’t make the shortlist for being environmentally friendly, it can be hit with unlimited fines if it causes environmental damage.

Waste must be properly contained, treated and stored. Whoever disposes of your waste must not only be legally authorised to do so, they must also do it properly.

Last month, the Environment Agency took an Oxfordshire haulage company owner and the landowner of a mushroom farm to task for illegally dumping 3,000 tonnes of illegal waste at the farm site in Bampton. A court ordered them to pay £21,000 in fines and costs.

Your business mustn’t be a source of nuisance through noise, smoke, smells or other pollutants that could potentially harm the health or wellbeing or people living or working nearby.

Emissions must be checked by your local authority and the Environment Agency.

What’s the verdict?

The jury isn’t out on this one.

Whilst it may not always be possible for you to keep abreast of all the laws and regulations that apply to your business, it pays to enlist the services of someone who can.

Here’s a maxim for you: keep the laws, keep your business.1o