Business Start-­Ups

Why Do I Need a Solicitor to Start Up a Business?

Start-ups and new businesses need to consider from the outset the business structure most suitable to their needs. Woodfines’ Company Commercial team has a wealth of experience in assisting business owners and entrepreneurs in this regard and can provide advice upon the full range of business structures available.

When setting up a business, certain documents are necessary, or advisable, in order to regulate the relationship between the founders and the business entity. Woodfines’ Company and Commercial Law experts have vast experience of drafting such documents, including shareholders’ agreements, limited company constitutions and partnership agreements, which reflect the specific requirements of business founders. We can also advise upon the initial protection of businesses’ commercial interests, such as the protection of intellectual property.

As a full service law firm Woodfines can also assist you with the full range of start-up legal issues, including those relating to business premises, employment and corporate governance.

Choosing a Business Structure

It is critical that the business structure selected meets the specific requirements of the business start-up. Woodfines’ Company Commercial team can guide you through the decision making process. We will take the time to thoroughly understand your business in order that we can accurately advise on the pros and cons of each suitable business structure.

We can advise and assist in relation to the full range of business structures, including the most commonly used types as set out below:

Partnership

Partnership is defined at law as the relation which exists between persons carrying on a business in common with a view to profit. As it is a matter of fact whether a partnership exists, there are few formalities involved in set-up and relatively few formal requirements as regards the ongoing operation of the same. However, partners remain jointly liable for the partnership debts.

Normally, the relationship between partners is governed by a partnership agreement which sets out the way in which the partnership will operate. Such a formal agreement is often necessary to ensure that the partnership is appropriate to modern business life and the needs of the partners. By way of example, legislation currently provides that, where no fixed term has been agreed, any partner may determine the partnership on giving notice to the other partners.

As well as providing effective partnership agreements and advice in respect of start-up, Woodfines’ Company Commercial team can provide ongoing support for the lifecycle of the partnership. This support includes, but is not limited to:

  • The drafting of terms of trading
  • The variation of terms of the partnership agreement
  • Assistance with the admittance of new partners
  • Assistance with the exit or retirement of existing partners
  • Delivering advice on commercial issues such as data protection, confidentiality and the protection of intellectual property
  • Advice and assistance on e-commerce matters, such as website terms and conditions of use
  • Transferring the business into a Limited Liability Partnership or other vehicle
  • The dissolution of the partnership.

Limited Liability Partnership (‘LLP’)

An LLP is a body corporate incorporated by registration at Companies House and therefore a legal entity separate from its members. LLPs provide the organisational flexibility of a partnership with the benefit of limited liability, the ability to create floating charges and taxation as a partnership. Members of an LLP also benefit from the fact that any members' agreement is a private document which is confidential to the members. However, they are subject to accounting and filing requirements broadly similar to those of a company.

Normally, the relationship between members is governed by an LLP agreement between the members which sets out the way in which the LLP will operate. As well as providing advice and assistance in respect of the start-up, incorporation and the drafting of an LLP agreement, Woodfines’ Company Commercial team can provide ongoing support for the lifecycle of the LLP. This support includes, but is not limited to:

  • LLP secretarial support, including the maintenance of statutory registers and filing documents with Companies House
  • The drafting of terms of trading
  • The appointment of Designated Members
  • Delivering advice on commercial issues such as data protection, confidentiality and the protection of intellectual property
  • Advice and assistance on e-commerce matters, such as website terms and conditions of use
  • The admission of new members
  • The cessation of membership
  • Assistance with insolvency matters

Limited Company

The Companies Act 2006 (the ‘2006 Act’) provides for the incorporation of three types of company:

  1. Company limited by shares
  2. Company limited by guarantee
  3. Unlimited company.

The most common form is the company limited by shares. These may be either public or private companies. Only private companies may be incorporated as unlimited companies or companies limited by guarantee.

The advantages of incorporation as a limited company generally include: limited liability, further options for raising finance and more straightforward business disposal processes. The main disadvantages of the limited company structure are the relative complexity and cost of start-up and the increased administrative burden of company law.

Woodfines’ Company and Commercial law experts can provide advice and assistance in respect of the choice of company type, start-up, incorporation and ongoing operation of limited companies. We can advise upon the full range of legal issues involved in the lifecycle of limited companies, including, but not limited to:

  • The incorporation of limited companies
  • The preparation of constitutional documents, such as articles of association
  • The drafting shareholders’ agreements
  • Company secretarial services, including the maintenance of statutory registers and filing documents with Companies House
  • The provision of advice in respect of corporate governance issues
  • The protection and exploitation of intellectual property rights
  • The drafting of terms of trading
  • Delivering advice on commercial issues such as data protection, confidentiality and the protection of intellectual property
  • Disposals
  • Private share issues
  • Reductions in capital
  • Company reconstructions
  • Corporate finance, including debt and equity funding
  • Advice and assistance on E-commerce matters, such as website terms and conditions of use and IT contracts.

Other Business Structures

In addition to those set out above we can provide advice and assistance in respect of the full range of business types available, including, but not limited to: sole traders, limited partnerships, unlimited companies, community interest companies and unincorporated associations.

For more information

If you would like further information and advice in respect of starting up a business, please contact a member of our Company Commercial team.