Business start-ups: your top five questions answered

9 March 2017

Business Companion supports you to achieve and maintain compliance with trading standards and consumer laws. How does it do this? It is designed by trading standards and consumer law professionals, in collaboration with business, to provide you with clear, accurate and practical advice.

It is this collaboration with business that enables Business Companion to focus on the questions that you want answers to.

Business Companion understands that starting a business can be an exciting yet daunting prospect. All too often it can seem as if your bright idea is overshadowed by the complexities of the law. This is where Business Companion proves its worth by giving you not just legal, but practical answers to your key questions.

Q. I am considering setting up a business as a sole trader and I have decided to trade under a name that is different to my own. I may even decide to register as a limited company. What does the law say about business names?

A. It's about being transparent to those you do business with. If you set up a business under a name that is not your own, you must disclose your full name and business address. This information must be prominently displayed at your business premises (if consumers and suppliers have access), on business documents and on your business website, if you have one. If a consumer asks you for your business details, you must provide them in writing.

The rules are a little more complicated if you decide to register your business as a limited company. There are restrictions on the company name you can use. Make sure it's not too long, it isn't the same as the current registered company, you only use permitted characters, signs and symbols and that you don't use any banned words. The registered company name must be clearly displayed at your company's registered office and any other locations where your company does business, as well as on all business documentation.

Q. I want to create a unique image for my business and this involves having a logo that no one else has. I'm worried that it may be copied by a competitor. What would you advise?

A. Trade marks, copyright, designs and patents are collectively known as intellectual property (IP). IP goes to the heart of what your business is about and becomes a valuable business asset. If you want your logo to become a trade mark, you should register it with the Intellectual Property Office. This will give you legal protection over its use. For example, if a competitor used it without your permission, you could take court action against them and they may also have committed a criminal offence. As you build your business up, you can grant licences that would allow others to use your trade mark, or any other IP you may own, on payment of a licence fee.

Q. I am about to open a store on my local high street selling homewares. Is price marking of goods covered by the law?

A. Yes. When you sell to consumers, the price of goods must be clear, easily identifiable and must include VAT (value added tax).

Be careful not to mislead consumers with confusing or incorrect prices - you could be breaking the law. You have the option to put the price on the goods themselves, on a ticket or notice near the goods or include it in a price list or catalogue, but make sure it is close to the goods. Make sure the price is clearly visible to consumers without them having to ask to see it - this is good for business as well as being a legal requirement. It's very easy to lose a sale if a consumer does not have all the information they need at the time they want it.

Q. I am looking to set up a new business, as a limited company, supplying and fitting double glazing. I will guarantee the installations but what legal rights to consumers have?

A. Supplying double glazing and installation service together as part of the same contract is known as a 'mixed contract'.

The law says that the double-glazing you supply, as well as any fittings and accessories, must be of satisfactory quality, as described and fit for purpose. The installation must be carried out with reasonable care and skill, in other words correctly. If a consumer complains within 30 days that the double glazing is faulty, they are entitled to a refund. They can if they wish opt for repair or replacement during this timeframe, but you cannot insist on this. After 30 days, repair or replacement is the usual remedy. If a repair or replacement doesn't work, if it is not cost effective for you or cannot be done in a reasonable time, a consumer is entitled to a reduction in the price or the final right to reject, which means money back (less usage if it applies).

If you haven't installed the double glazing correctly, you must carry out the work again free of charge. If the double glazing isn't faulty but you damaged it because of your poor installation, a consumer is entitled to a repair, replacement, reduction in price or the final right to reject.

Q. As I have not been trading very long and am still building up the business, I don't want to accept returned goods from consumers. Can I display a 'no refunds' notice?

A. No because you will be breaking the law. In certain circumstances consumers have the legal right to a refund. For example, if goods are faulty or if consumers have cancellation rights because the goods were bought off-premises (such as during a visit you made to their home) or at a distance (such as online), you cannot have a sign, a notice or even a term in a contract that takes those rights away.

This information is intended for guidance, only the courts can give an authoritative interpretation of the law.

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