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Describe the legal and financial aspects that will affect your business start-up.

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Introduction

Unit 10 A4 P4 Describe the legal and financial aspect that will affect your business start-up Legal aspects - Introduction There are many laws and regulations surrounding the conduct of a new business. All businesses will have similar legal responsibilities. For my business I choose the legal status to be sole-trader, because is the simplest and the cheapest form of business to set up. Advantages of being sole-trader: * The business can be easy to set up * Independence in decision making * Minimum of paper work * The sole trader may have flexible working hours * Knowing customers helps to avoid bad debts Disadvantages of being sole-trader * Unlimited liability means the owner is responsible for all debts * Long working hours * In case of illness the business is closed and makes no money * Difficult to rise capital for start up or to expand business The key legal aspect is liability, which means I as the owner of the business will have legal responsibility for the actions and the finance of the business itself. Because I choose to be sole-trader I will be fully responsible for the debts of the business and its actions. ...read more.

Middle

There are number of approaches to pricing and a business may use more than one, depending upon circumstances. The most common used by small businesses is * Cost-plus pricing; this means the business charge for their product enough to cover all cost incurred in production and earn profit. Monitoring financial control Financial data and forecasts from the basis of business ability to raise finance negotiate the purchase of the premises and order raw materials. If the business is inaccurate in their forecasting then there will be insufficient money available to the business. Potential problems regarding cash flow or profitability must be considered at every stage. If there are shareholders they will be demanding the true state of affairs within the business. Cash flow forecasting - is the simplest form of recording cash received by the business and indicating when cash will be needed to pay bills. The business must be able to pay their bills on time, so the cash flow enables them to estimate their ability to do this. A new business will include a cash flow forecast in its business plan where the bottom line estimates the monthly cash surplus or deficit. ...read more.

Conclusion

Changes to tax laws and minimum wage can have an impact on the finance of a business. The categories that legislation changes fall into are: * Health and safety can look at aspects of how the business is protected against fire and precautions that are taken for various dangers. Examples of laws that may affect these rules are food hygiene, environmental health - weights and measures. * Employment law can change the way that businesses are allowed to hire employees and regulations that they must follow to ensure that employees are chosen fairly. Examples of laws that will have to be followed in these cases are National Minimum Wage laws and contracts of employment. * Consumer Protection this looks at how information is kept about customers, when a customer makes a purchase with the business; the business has to ensure it has the consumer's permission to keep the data. This data has to be kept securely within the business. Examples of laws that will have to be followed in these cases are data protection, trade description and sale and supply of services act. * EU Law will have to be taken into consideration by a business when trading with other countries and shipping out packages. ?? ?? ?? ?? Ewelina Kazanowska ...read more.

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