Business and the law are entwined and is relevant when forming a new business and subsequently.
The initial decision facing an entrepreneurial is to decide on the structure of the business, which can be sole trader, partnership or limited company. It is important to consider which option you choose and to seek assistance in finalising your decision. The chosen option will determine how you are taxed and the business records, which are to be kept.
The following briefly outlines the pros and cons for each option:
- Is easy to set up
- Regulations are minimal
- You are personally and totally responsible for all the business debts and liabilities
- There is not a requirement to file financial accounts to the company office for public disclosure
- It is possible to change the business structure to for example, a limited company
- As for a sole trader it is easy to set up
- Responsibility is shared amongst the partners in the business
- The expertise and experience of the partners may complement each other
- Liability is unlimited and partners may be personally responsible for the business debts
- It is advisable to prepare a partnership agreement detailing share holding of the partners, division of profits and procedure to be adopted in event of break-up
- It is considered a separate legal entity and ownership is transferable by share ownership
- Liabilities of the company are not the responsibility of the directors
- It needs to be set up by legal and fiscal formalities
- Financial accounts and other information must be lodged each year in the Companies
- Office in compliance with the Companies Acts
After deciding the structure of the business and once you begin trading there are further legal requirements covering employment, health and safety, pollution control, revenue and a lot more. One should seek professional advice to ensure compliance.