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Legal advice crucial to starting a small business

Sep 19 2007

A small firm may fail before it has been given a chance to succeed - if proper legal checks are not taken when starting up, it has been suggested.

According to legal specialists Thring Townsend Lee & Pembertons, entrepreneurs may even put their personal assets at risk if they are not advised on the right sort of company for their business.

Spokesman for the firm, John Davies says: ' First of all they need to take advice on what kind of entity they intend to be.

'So if it’s a one man band, for example, they may well be better off as a sole trader.

'If they are two or more people looking to make a profit, they could become a partnership or they could become a limited company or a limited liability partnership.'

He continues: 'A number of small businesses or people starting out may not realise the responsibility and the liability that comes with [a business].

'Start ups choose the limited liability company because if it’s a limited company you limit your own personal exposure.

'So, if things go wrong, it's the business that becomes insolvent and not you.'

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