A self-employed person has many legal matters to consider during both the set-up and running of their business. Firstly, they must determine which legal framework is the most suitable for their business. A self-employed person can operate as a sole trader or within a partnership. They may also create their own limited liability company. The legal implications of these different frameworks for business are an important consideration for a self-employed person, and in order to make the right decision they are advised to seek legal advice from a commercial solicitor.A self-employed person must then consider their work premises. If they plan to work from home they must ensure that there are no restrictions in their title deeds, or in their lease agreement if the property is rented, which prevent them from operating a business out of the property. Company solicitors can assist the new business to ensure their home can be used legally. This is important, as any claim made against an insurance policy could be voided if the proper clearances were not obtained before the business commenced trading.
If the person plans to buy or rent a new property to act as their business premises, the normal legal process of conveyance will be necessary. A self-employed person also must consider whether or not they require a licence in order to run their business or provide a service. For example, if a person is setting up a catering business, they will need to notify their local authority 28 days before the business opens. They must also comply with food hygiene legislation. It is vitally important to obtain legal advice about any licences that might be needed.
Any self-employed person that employs other people in the course of their business, have a duty to follow health and safety legislation. They will also be required to take out employer’s liability insurance to cover them for employee illness and injury as a result of their employment. A self-employed person may also be required by law to take out public liability insurance. This covers them against claims from members of the public who have suffered an injury or property damage as a result of their negligence. These insurances are essential to protect a self-employed person from any legal action taken against them. Company and commercial solicitors can advise on which insurances are suitable.
A self-employed person must register with HMRC as after they have begun to work as self-employed. This is for income tax and national insurance purposes. They may also have to pay business rates to their local authority in addition to council tax. A self-employed person must also consider if they have to register for VAT. A business must register for VAT if they provide goods or services that are ‘taxable supplies’ and their turnover has crossed the VAT threshold. Legal advice from a commercial solicitor will help the self-employed business ensure it fully complies with all the tax regulations that apply.