Legal Issues When Running a Business

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Legal Issues When Running a Business

Running a new business in the UK? You might be familiar with some of the critical legal obligations defined under UK employment law. While it might seem overwhelming at first, you have to accept the responsibility of anticipating and tackling these legal issues in a timely manner. Otherwise, you may find yourself in direct conflict with the legislation. To help, here is an insight into the legal issues that are usually associated with the running of businesses.

Legal Issues Before Incorporation

During the setup phase of any business, a number of legal issues crop up like the choice of business structure or business licenses. Here are some of the most common legal issues you will definitely face when starting your company.

Choosing The Business Structure

Having a clearly defined business structure is not only an important legal obligation but also an operational one. When starting a business, you must first put some thought into determining your company’s structure – whether you want to register as a sole-proprietorship, limited partnership, partnership, corporation or limited liability company.

Often, the choice depends on the liability considerations and the also the perfect formula with regard to tax laws. The choice of structure also depends on the focus of your operations and your team. To get better insights into the different choices and their ramifications, it is advisable to consult an experienced lawyer.

Define Relationships Within The Company

During the initial stages of any company, it is also important to regulate the relationships within the organisation. This will help distribute the liabilities and responsibilities within the teams both clearly and properly. You need to make sure that you get everything in writing – whether it’s the ownership, partnerships or employment. Otherwise, there may be situations in which you will find yourself caught up in legal issues in the future.

Business Licences

Depending on your business operations, you may need to apply for licenses, otherwise, you may experience legal problems. At the very minimum, you will require a tax registration and a business license. If your business operations are regulated, you may have to go to the relevant authorities and obtain permits to operate.

Legal Issues After Incorporation

Once you are done with the incorporation of your company and you commence operations, there are a number of legal issues that you may face. Here are some of the most common legal concerns for businesses as described in the SMEs & The Law l Survey on Biggest Legal Concerns 2015.

Late Payments

More than 11% of the companies that participated in the survey agreed that late payments from contractors and subcontractors were a nuisance and one of the most common legal issues that they faced. Many of these issues, however, can be promptly resolved through the Small Claims Court system.


Taking care of the taxes is important after you have incorporated your business. Almost 9% of all medium and small businesses faced legal concerns related to taxes. To avoid such hassles, therefore, it is essential that you register with the tax authorities and coordinate all accounting procedures. This will help you comply with all the applicable tax laws.


Maintaining functional employee-employer relationship is an essential aspect of any business. As a business owner, therefore, you need to design and implement comprehensive workplace conduct policies and employment contracts that can help streamline the functioning of the workplace. You may also take employment law advice from experienced solicitors to make sure you have proper employment contracts and that your work policies are compliant with the employment law in the UK.

If you don’t have perfectly outlined policies in place, you could potentially face claims for unfair dismissal, breach of employment contract or discrimination. If you are not compliant with the health and safety regulations on the workplace, this could also be a cause of concern for your business.


Contract law forms the basis of any legal relationship between employer and employee. According to the survey, up to 7% of all businesses had to face contract issues between 2014 and 2015. Therefore, you need to make sure that all the contracts are carefully drafted. You can do this by getting all the legal agreements checked by an experienced employment law solicitor.

Intellectual property

If your company works on creating content or developing new products or services, you will will have to deal with legal issues relating to intellectual property. According to the survey, almost 5% of the companies faced IP issues between 2014 and 2015. Therefore it is important that businesses take all necessary precautions to protect their intellectual property rights.

You can protect your ideas and identity by either patent laws or copyright laws. On the other hand, you can protect your business identity including names, logos, and designs by trademark law.