Companies and their directors have a number of obligation s placed upon them from day 1 – some of these will be imposed by their investors or other key stakeholders, others are statutory obligations. Click here to read our factsheet.
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Employment and Human Resources
With growing employment law complexity, businesses must ensure HR systems comply with key regulations. Compliance starts with the first employee, requiring legally compliant contracts, disciplinary and grievance procedures, and secure employee records, including proof of work and payroll details.
Non-compliance risks are serious and can include fines or imprisonment. As the company grows and employs five or more staff, there will be further statutory requirements such as providing a Stakeholder pension scheme, as a minimum.
Read more in our factsheetInsurance
Legally a company needs to have Employers’ Liability Insurance and Public Liability Insurance. Depending on the nature of the business, it may also be advisable to have Professional Indemnity Insurance and Key Person Insurance.
There may also be industry specific insurances required if, for example, the company is carrying out clinical trials.
Health and Safety
Employers and employees have a duty to act responsibly under the Health and Safety regulations and this extends to welfare issues like preventing stress in the work place.
Companies will need a Health & Safety Policy, and will be required to undertake various risk and Control of Substances, Hazardous to Health Regulations (COSHH) assessments depending on the nature of your business. Aspects such as first aid, fire precautions also need to considered.
Books and Records
All UK limited liability companies are required to keep records of their financial transactions and must be sufficiently detailed to accurately assess the financial position of the company at any point in time and to enable it to prepare a profit and loss account and a balance sheet.
Most companies use an appropriate accounting system and external funders will typically require that a company produces monthly management accounts, so they can monitor actual performance against forecast. A company is required to file certain documents either with HMRC or Companies House, which we cover in the Compliance section.
Initial steps
To help to manage these obligations in the early days of a company’s existence in summary it needs to:
- Set up an HR system
- Set up an accounting system
- Register the company for payroll taxes
- Depending on staff numbers set up a stakeholder pension scheme
- Register the company for VAT
- Get appropriate insurance