Running your own business comes with a host of important legal responsibilities. These will vary according to the structure of your business, the size of your business and whether you are an employer or not.
Company directors have a number of legal responsibilities to discharge, including notifying Companies House of changes in the structure and management of the company; filing the company's annual return and annual accounts with Companies House; ensuring that tax is paid on time; and compliance with employment and health and safety law.
Health and safety
All employers (regardless of whether they operate as sole traders, partnerships or companies) are legally responsible for the health and safety of both their employees and visitors to their premises such as customers, suppliers and the general public.
Their legal responsibilities include:
- Properly maintaining machinery and equipment so they are safe to use
- Storing hazardous materials safely, providing protective clothing and training staff to handle them
- Making adequate first aid facilities available
- Drawing up plans for evacuation in the event of an emergency
- Ensuring that ventilation, temperature, lighting, and toilet facilities all meet health and safety requirements
- Checking electrical equipment is safe
- Reporting incidents to the Health and Safety Executive or local authority, depending on the nature of the business.
If you're an employer, you should carry out risk assessments to spot possible health and safety hazards and employ a 'competent person' to take charge of health and safety issues. If your business employs five or more people, you should keep an official record of the assessment findings and put a formal health and safety policy in place.
Employers have other legal responsibilities to their staff outside health and safety legislation, such as the Equalities Act. These include:
- Not discriminating on the grounds of sex, sexuality, race, nationality, age or disability when hiring, managing, disciplining or dismissing staff.
- Giving staff paid annual leave - 28 days including public and bank holidays for full-time employees. Part-timers' leave is calculated on a pro rata basis.
- Giving staff time off work for reasons such as jury service, trade union duties, pregnancy, illness and parental responsibilities.
- Ensuring that employees do not work longer than 48 hours in a week unless they have opted out of that limit.
- Providing employees with an employment contract or written statement that outlines their duties within two months of their start date.
- Choosing a fair reason - and following a fair process - for redundancy, offering a suitable alternative job if one exists and making a redundancy payment if applicable.
Although employers do not have to follow a statutory disciplinary procedure, arbitration service ACAS has produced a code of practice on disciplinary and grievance procedures that sets out the basic principles they should follow.