1. Know how different aspects affect preparation for a business
P2. How regulations and laws for small businesses can affect preparation for business

2. Today’s Objective

4. Regulations and laws for small businesses
All businesses have to abide by the law of the land as well as specific regulations that apply to their type of business
There are thousands of laws, which can be very complex
We can work out which ones apply to a small business based on legal status

5. Legal Status Ownership Sole Trader Partnership Private Limited Company
Franchise
Public Limited Company
Worker’s cooperative
Public Ownership

6. Legal Status
Advantages
Disadvantages
Sole Trader
Freedom to do things the way you want to
Minimal reporting to government bodies
Unlimited liability
Lonely existence
Need to have a wide range of skills – marketing, finance etc.
Partnership
(As per sole trader) +
Shared problem Solving
More money to invest
(As per sole trader)+
Risk of disagreeing on key issues
One partner may not work as hard as the other but still take 50% profit
Private Limited Company (Ltd)
Liability for debts limited to the amount of money invested
Opportunity to attract more money from additional private shareholders.
Seen as a more solid enterprise by banks and customers.
Additional regulations and paperwork. In some cases accounts may have to be independently audited.
Accounts have to be sent to Companies House as well as HM Revenue and Customs
Franchise
Product/Service already designed/known
Trading Support and advertising provided
Could be halfway stage for someone who wants their own business
Franchisor charges a fee and takes a share of the profit.
There is a limit to how much freedom the franchisee has to make own decisions.

7. When legally starting a business...
The business must inform one or more government bodies about their business at the time it is being started or shortly afetr
HM Revenues and Customs (HMRC) must always be informed because tax is due from profits