Considerations when your start-up business starts to grow

By Neil Logan

Small businesses accounted for 99.3% of all private sector businesses in Northern Ireland and the rest of the UK at the start of 2017 and 99.9% were small or medium-sized (SMEs).

Many of those companies will have started life as a one-man enterprise working from home. As they become more successful, small start-up businesses start to consider taking on employees, finding new premises to operate out of, obtaining commercial finance in order to expand and many other factors that come with success and growth. Many businesses will have started as two or more friends, and often on quite an informal footing. Going forward these businesses need to be formalised in order to deal with issues such as salary, holiday entitlement, liability for debts, defined ownership of the business, tax obligations, decision-making and other issues related to running the business.

There are a number of business vehicles available to entrepreneurs wanting to take the next step. They may consider creating a general partnership, a limited partnership or a limited liability partnership. They may even decide to incorporate and create a company. Different factors will determine which is the most appropriate step for an entrepreneur to take when seeking to formalise their business, and it is important to take advice on how best to proceed.

It will be important to consider your relationship with anyone else involved in the business, and the provisions you want to make for the future about the overall management of the business. It is also necessary to think about how you would want to resolve any possible future disputes, what liability everyone will have in respect of debts, and what the options would be for any party to leave the business down the line. There will also be tax and accounting implications and obligations to bear in mind.

If you want to speak to a company law solicitor in Northern Ireland to discuss any matter in respect of your business contact Wilson Nesbitt in Belfast or Bangor by clicking here.