Sole trader legal requirements
A sole trader business is simple to set up legally although certain trades may need a licence. These include nightclubs, taxi and car hire, restaurants, pet shops, indoor sports venues, adult shops, street trading, hotels, pet kennels, nursing homes, waste management, weapons sales and money lending. You can get a licence from the relevant local authority for most of these.
To make sure your sole trader business stays on the right side of the law refer to the relevant Acts of Parliament:
- Trade Descriptions Act 1972: makes it a criminal offence to knowingly make false or misleading claims – verbal or written – about goods or services you offer. This means such factors as ingredients, place of manufacture and customer testimonials as well as associating yourself with a brand without being entitled to.
- Sale of Goods Act 1979: dictates that goods you sell must be of satisfactory quality, match your promises of performance and be as you describe them.
- Supply of Goods and Services Act 1982: commits you to undertake services you offer with reasonable care, skill, time and cost.
- Data Protection Act 1984: directs you to register the source, nature and purpose of any personal data you keep about individuals except data used for internal administration like payroll. Registration forms are available at post offices.
- Consumer Protection Act 1987: holds you liable if you supply a faulty product causing damage or injury unless you can show that not enough was known about its dangers at the time of supply. And to protect yourself under this Act offer an estimate first and a written quote only when you have properly assessed costs.
- Price Marking Order 1991: makes it compulsory to put the price of goods offered for sale in writing.
You should consider any legislation relating to environmental and health and safety requirements. Also check the planning and building regulations relating to your premises. Local authorities and the Department of Trade and Industry should be the first ports of call for this.