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Starting an E-Business – Considerations

Please contact David  for further information if you are lookng to set up an e-business

Starting an e-business may seem very attractive. Setting up such a business has never been easier, with more and more tools becoming available to create a website, online shop and accompanying app all from the comfort of your own home and regardless of technical ability. Get it right and you could soon be enjoying a booming business, earning income while you sleep and reaching customers all around the globe.

There are a number of legal points to consider when starting such a business. A few of these are listed below. There are initial upfront costs but thinking the legal aspects through and getting on the right tracks from the outset could save a fortune in the longer run.

Business Structure

When starting out, consideration needs to be given to the structure that the business will take. Generally, there are three options available:

  1. Sole Trader;
  2. Partnership;
  3. Limited Company.

There are pros and cons to each business structure. Starting as a sole trader is the most commonly used method and is the easiest way to run a business. It does however, leave you personally exposed to all debts of the business, and indeed open to legal action from any disgruntled creditors.

If you are setting up the business with others, a partnership model may be preferential as it promotes capital investment in the business. It is beneficial to have a partnership agreement in place in case the relationship sours. However, in a partnership you are still exposed, as the partners are jointly liable for the debts of the business.

Although administratively more burdensome to set up, a limited company is a separate legal entity which would carry out the business, protecting you from potential personal liability of the debts of the business. It can also increase your credibility as a business.

Trademark registration

In a digital marketplace, a trademark can be a very valuable asset. A trademark will identify your brand and carry your reputation. It can be made up of words, designs, letters, numerals or the shape of goods or their packaging.

Although not a legal requirement, registering a trademark will give you exclusive right to use it in the UK. It will also be easier to take legal action if you discover your mark is being used by another business.

Customer Privacy

Through the conduct of your business, you will gain access to your customers’ personal information.

The rules governing how a business can collect, use and disclose customer information is governed by the Data Protection Act 1998.

The best way to protect yourself from falling foul of the obligations under the Data Protection Act and gain consent, and trust, of your customers it with a privacy policy. This should be visible on your website and easily accessible.

A privacy policy needs to be carefully drafted as it will form a binding contract between you and your customers.

Moving forward

Sykes Anderson Perry are able to advise you on getting your business up and running. We understand cash is normally tight at the outset and you need some certainty on fees. This is why we have a menu of costs below so you have an idea of what you will be involved in from the outset. We are able to advise you on the legal requirements needed to get your business started, along with:

  • Company formation From £350 plus VAT

  • Articles of association From £500 plus VAT

  • Shareholder agreements From £1,500 plus VAT

  • Partnership agreements From £1,000 plus VAT

  • Privacy policies and data protection policies From £500 plus VAT

  • Contracts of employment From £500 plus VAT

  • Employee handbook and disciplinary and grievance procedures From £750 plus VAT

  • Consultancy contracts From £500 plus VAT

  • Terms and conditions of business From £1,250 plus VAT

  • Trademark advice and registration From £500 plus VAT

  • Software licences From £750 plus VAT

  • Loan agreements From £500 plus VAT

  • Security documentation From £750 plus VAT

  • Non-disclosure agreements From £500 plus VAT

  • Tax considerations, including EIS and SEIS relief From £750 plus VAT