99237273
James Tilley
Unit 36 – P5
Legal aspects of a start-up business
When startng a business, there are various hoops which must be passed through to allow the
business to begin.
The frst is to gain the correct legal status of the business. This is important as it will afect the way
the business is run, as well as having implicatons which may afect how the company pays tax as
well as the recording of accounts.
Setting the company up as a limited company, the name must be registered with the government
companyhouse website. This is a legal requirement as it helps the business to be held accountable
and makes sure it can be easily located by the government if they need.
The legal status will then afect the way tax, natonal insurance and other fnancial requirements are
conducted and paid, for example, as a limited company, you are required to submit accounts to
company house to make sure they are correct, whereas small companies with an annual turnover of
less than £6.5 million, this is not audited. Limited companies also can claim back VAT, which also
means they have to charge their customers VAT, which can in turn decrease profts.
Health and safety laws must be followed by any business no mater of the size. This is because if
there is an injury, the business will be held accountable, which could then lead to the downfall of the
business if it is found that health and safety laws were not followed correctly.
A business which employs staf is legally required to have insurance with a minimum pay-out of
£5,000,000. This is to protect the worker if they have an injury, or decide to sue the company, and it
also means that the company will not be lef out of pocket in this eventuality.
Laws, regulatons and government acts, such as the Sales of Goods act, Natonal Minimum Wage act,
Equality act and Working Time Regulatons as these set out the laws behind the employees of a
business regarding wages, how to employ staf with equality, how long the workers can work, as well
as any maternity or paternity tme they can claim of, sick leave and natonal leave, as well as acts
which set out how goods can be sold, such as the Sales of Goods act.
James Tilley
Unit 36 – P5
Legal aspects of a start-up business
When startng a business, there are various hoops which must be passed through to allow the
business to begin.
The frst is to gain the correct legal status of the business. This is important as it will afect the way
the business is run, as well as having implicatons which may afect how the company pays tax as
well as the recording of accounts.
Setting the company up as a limited company, the name must be registered with the government
companyhouse website. This is a legal requirement as it helps the business to be held accountable
and makes sure it can be easily located by the government if they need.
The legal status will then afect the way tax, natonal insurance and other fnancial requirements are
conducted and paid, for example, as a limited company, you are required to submit accounts to
company house to make sure they are correct, whereas small companies with an annual turnover of
less than £6.5 million, this is not audited. Limited companies also can claim back VAT, which also
means they have to charge their customers VAT, which can in turn decrease profts.
Health and safety laws must be followed by any business no mater of the size. This is because if
there is an injury, the business will be held accountable, which could then lead to the downfall of the
business if it is found that health and safety laws were not followed correctly.
A business which employs staf is legally required to have insurance with a minimum pay-out of
£5,000,000. This is to protect the worker if they have an injury, or decide to sue the company, and it
also means that the company will not be lef out of pocket in this eventuality.
Laws, regulatons and government acts, such as the Sales of Goods act, Natonal Minimum Wage act,
Equality act and Working Time Regulatons as these set out the laws behind the employees of a
business regarding wages, how to employ staf with equality, how long the workers can work, as well
as any maternity or paternity tme they can claim of, sick leave and natonal leave, as well as acts
which set out how goods can be sold, such as the Sales of Goods act.
