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5 laws that can help protect your UK start up

5 laws that can help protect your start up

When you’re starting up a new business, it’s vital that you understand business law in the UK, as it’s your responsibility to ensure you do everything possible to limit risks. Read on to learn about five laws that will help protect your start up and make sure your business runs smoothly. It’s worth noting that The law can be a potential minefield for the inexperienced and it’s best to seek legal advice from a specialist small business website like Lawbite.

1. Be careful what you say

An important step is to avoid saying or doing anything that could leave you open to being sued for libelous statements against the opposition. If you’re advertising on your own website, or sending out mailing shots, you might be tempted to criticize the opposition in an attempt to draw more business your way. However, under the Defamation Act 2013, you could be sued for writing potentially damaging statements about business rivals  so it’s best to stick to positive publicity about your own services and make sure your own ethics are above reproach.

2. Make sure you understand UK tax laws

It’s probably a good idea to hire a competent accountant if you’re unfamiliar with running the financial side of your own business. The moment you start working for yourself, you’re already classed as self-employed, even if you haven’t informed HM Revenue and Customs. It’s also mandatory that you register for VAT if you’re expecting to make more than £82,000 a year. Understanding the Corporation Taxes Act 1988 will ensure you don’t fall foul of the tax man and end up in court owing money, with your business’s good name tarnished.

3. Ensure your goods and services are of a high quality

When you start up your own business, you are required by law to provide goods or services that are of a satisfactory quality. The Sale of Goods Act 1979 stipulates that the goods you sell must be as described. They must be of a satisfactory quality, matching your promises of performance. Similarly, the Supply of Goods and Services Act 1982 requires that you undertake any services that you offer with reasonable skill, care and time, at a reasonable cost. Failure to adhere to this could see you fined. The Consumer Protection Act 1987 holds you responsible if you supply a sub-standard product that causes damage or injury.

4. Insure yourself properly

By law, you’re required to have insurance for a small business. There are various types of business insurance, some compulsory and others advisable. You will require professional indemnity insurance and employers’ liability insurance – you can find more info on this in It’s useful to also insure yourself against liability if an act of nature, or some uncontrollable act, prevents you from fulfilling a contract. This could leave you open to legal action, so you need to stipulate that you’re not liable for unfinished work if it’s due to these factors.

5. Should you be a sole trader or a limited company?

The laws relating to how you should run your business can seem complicated, with various pros and cons to registering as a sole trader or a limited company. It seems attractive that as a sole trader, you retain complete control of your company, but less inviting that you’re also responsible for debts. A limited company offers more financial security and potential tax benefits, such as company shareholders being liable for a debt according to only the level of their own investment.



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