M3 legal and financial aspects affecting your chosen business
- 1. Unit 17 – (M3) Legal and Financial Aspects of your chosen Business Referring back to your P3 task, complete the following 2 tables: 1. Legal Aspects Aspects The impact it will have on A description of the your chosen business system(s) in place for addressing such issues 1.Legal Status Legal statuses will have an A system in place to stop effect on my business as businesses from breaking the they’re official laws and I have law is fines. If a business to abide by them and I will breaks a law like not declaring definitely be punished if I do not their own taxes or completing follow them. If I do not abide by a tax declaration they will face laws like notifying HM Revenue a fine. This addresses the and Customs to become a sole issue of businesses breaking trader, I will face a fine which laws as if a business loses will affect my business as it will money it is only affecting their lose my business money that I business as a whole. may need to spend on supplies and objects to improve my business and bring in more customers and money. 2.Legal Liabilities Legal liabilities will have an A system in place for impact on my business addressing this issue is bank because as a sole trader I have loans. This means the bank unlimited liability which means if can lend you money which my business is in debt I will can help business’ in debt pay have to cover these costs with off their debts and put them my own money. This will have back on track financially. an impact on my business as it will be losing money and I won’t be able to cover it as I will be trying to cover debts with my
- 2. own money. 3.Trading terms and Trading terms and conditions A system in place to address conditions will have an impact on my this issue is the list of trading business because it will make terms and conditions. This sure customers behave means the customers have to correctly and abide by the rules. abide by the trading terms and If I do not have trading terms conditions and if they don’t I and conditions then I have can report them. nothing to control my customers, if they believe they deserve a refund but I do not I will have no trading terms and conditions to support this. 4.Trading standards Trading standards will have an A system in place addressing impact on my business as I will this issue is the customer’s have to ensure products are rights. If a customer is described on the packaging, the unhappy with their products product or service is fit for the they can make a complaint, use described and the product demand a refund and give you or service is of satisfactory bad feedback. This has a quality. If I do not do this it will negative impact on a have a negative impact on my business. business as I will receive complaints and bad feedback from customers which will prevent new customers from visiting which will result in my business losing money. 5.Licences Licenses will have an impact on A system in place addressing my business as if I don’t have this issue is fines. If a the licenses needed I will be business does not have a punished. This will give my license but needs one, they business a bad name and my will be fined which will make business will lose money. It will them lose money. They will
- 3. also impact my business as I not be allowed to continue need to pay for them which will what they were doing. For affect my business’ financial example if they were selling situation. Also, if I don’t have a food and did not have a food food license I will not be able to license they would not be sell food in my business, this allowed to sell food from then will affect my business as I will on. lose potential profit. 6.Legal record Legal record keeping will have A system in place to address keeping an impact on my business as I this issue is fines. If a will have to legally keep records business does not keep of bills, revenue, taxes and records of taxes and bills, etc. receipts of stock I buy. It will They will be fined huge have an impact on my business amounts of money which will if I do not keep legal records I have a huge impact on a will be fined huge amount of business. Fines help money which will affect my businesses legally keep business financially. My records as they don’t want to business could also be shut be fined. down. 7.Resolving Resolving problems will have A system in place to address problems an impact on my business as it this issue is the police. If a will help my business stay business does not solve protected and not break the problems like public nuisances law. If I do not resolve problems and burglaries, the police can it will have a huge impact on my handle them. business. For example if I do not contact the police when I think public nuisances are occurring or a burglary is taking place my business could get damaged which means I would have to pay even more money for repairs. If I don’t perform CRB checks on my employees they will cause a problem as
- 4. they could be dangerous and hurt the children who visit my centre. 9. Health and safety The health and safety laws will A system in place to address have an impact on my business this issue is the health and as it will prevent my business safety laws. This prevents from doing certain things. For employers not giving example, I have to give staff a employees breaks they’re 20 minute break in each 6 hour entitled to. shift. This will have an impact on my business as I will have to make sure there are enough employees when some are on break. 10. Minimum wage The minimum wage will have A system in place to address an effect on my business as I this issue is the Pay and Work will have to pay my employees Rights helpline. This is a at least that amount of money. helpline for employees who This will affect me as the believe they’re being paid less money will have to come out of than minimum wage and are the money my business has entitled to more money. earned, this will result in less profit for my business. 11. Sex The sex discrimination act will A system in place to address discrimination have an impact on my business this issue is the sex as I will have to pay men and discrimination act, this makes women the same amounts of sure women and men are money if they’re doing the same treated fairly. It is against the job. This will affect me as it law to pay women and men means more money will be differently for doing the same coming out of my business to job. This means the pay all employees equally. government can prosecute businesses that commit this crime.
- 5. 12. Fire regulations Fire regulations will have an A system to address this issue impact on my business as I will is the fire regulations. They have to perform practice fire make sure people follow these drills and teach employees and rules and make sure people customers where to go if a fire are safe in a building. There occurs which can be time are also equipment to help consuming. If I don’t follow fire people, like fire alarms and fire regulations it will impact my extinguishers that businesses business as I and my have to have to keep employees will be in danger. If everybody in the building safe. a fire was to occur and I hadn’t performed any fire regulations my building could be burned down and my business would be ruined. 13. Planning Planning permission will have A system in place to address permission an impact on my business as I this is the “Enforcement will have to contact the council notice” which means if a if I want to make changes to the business does not get building which can be time planning permission and consuming and could waste my changes the building, they will time. If I do not get planning have to undo all of the permission I will have to undo changes. It is also illegal to all the changes I made which ignore a enforcement notice, would cost me even more so if a business was to ignore money and affect my a notice they could be fined or businesses financial situation. sent to prison. Legal contracts will have an A system in place to address impact on my business this is solicitors. They help because a solicitor will help me: businesses start and help set up my new business, buy them financially to make sure premises, collecting debts and they don’t break any laws and more. This will have an impact start properly as a business. 14. Legal Contract on my business as it will improve my business and my knowledge about the industry.
- 6. 15. Duties and Duties and responsibilities will A system in place to address responsibilities have an impact on my business this issue is bank loans. This because I am a sole trader enables people to borrow which means I am completely money from the bank. If a sole responsible for any debts that trader is struggling to pay off the business may have. This their business’ debts, they can means I am the only person in borrow money from the bank charge of paying off these to help them. debts. 16. Regulatory Regulatory bodies will have an A system in place to address Bodies impact on my business as they this issue is regulatory bodies. may contact me if a customer is They impose requirements, unhappy with my products or restrictions and conditions. service. This means they can This is to protect customers serve me a punishment, and it and make sure they have their will also give my business a consumer rights. bad name and could turn off potential customers. 17. Equipment and Equipment and supplies will A system in place to address Supplies have an impact on my business this issue is bank loans. If a as I will have to spend money business is struggling to on all of the equipment to start regularly buy supplies or my business like: play equipment, they can borrow equipment, tills, kitchen money from the bank so they appliances and counters, etc. I can afford what they need. will also have to regularly buy supplies like food to sell. This will have an impact on my business as I will have to spend lots of money on equipment and supplies which will take money away from my profit. If I do not buy equipment or supplies I will have no goods to sell to customers or no service to provide for customers,
- 7. therefore I will not have a business.
- 8. Legal Aspects Aspects The impact it will have on A description of the your chosen business system(s) in place for addressing such issues 1. Personal Survival A personal survival budget will A system in place to address Budget have an impact on my chosen this issue is bank loans. If I business because I will have cannot afford my essentials or to make sure I have enough I cannot afford to invest in my money to spend on my business, I can borrow money business but I also need to from the bank to help me and make sure I have enough help me stay on track. money for essentials that I need like food and clothes. This means I have to be careful in how much money I invest into my business. 2. Cost of premises A system in place to address have an impact on my this issue is bank loans. If I business as I will have to pay cannot afford my rent I can rent every month which will borrow money from the bank increase my expenses and to help my financial situation decrease my profit. 3. Running Costs The cost of the premises will and help me get back on track. Running costs will have an A system in place to address impact on my business as I this issue is will have to make sure I make enough money each month to pay for them. If I don’t have enough money to pay for my running costs I will find myself in debt and as I am a sole trader I will have all the responsibility in paying the money back which could result in my business closing down if I cannot cope.
- 9. 4. Employing staff Employing staff will have an A system in place to address impact on my business this issue is the minimum positively as my business will wage law. This means if an be able to get jobs done much employee is being paid less quicker and easier. It will also that minimum wage they can have a negative impact on my report it and the business will business as I will have to pay be punished as it is against them at least minimum wage the law. which means my business will lose money. 5. Pricing policy Pricing policy will have an A system in place to address impact on my business as I this issue have to make sure my business’ prices are cheaper than my competitors. I also have to make sure that my pricing policy is working and helping to beat my competitors. 6. Breakeven Breakeven will have an impact on my business because 7. Cash-flow forecasting 8. Profit and loss budgets accounts 9. Sources of fiancé 10. Financial record keeping
- 10. 4. Employing staff Employing staff will have an A system in place to address impact on my business this issue is the minimum positively as my business will wage law. This means if an be able to get jobs done much employee is being paid less quicker and easier. It will also that minimum wage they can have a negative impact on my report it and the business will business as I will have to pay be punished as it is against them at least minimum wage the law. which means my business will lose money. 5. Pricing policy Pricing policy will have an A system in place to address impact on my business as I this issue have to make sure my business’ prices are cheaper than my competitors. I also have to make sure that my pricing policy is working and helping to beat my competitors. 6. Breakeven Breakeven will have an impact on my business because 7. Cash-flow forecasting 8. Profit and loss budgets accounts 9. Sources of fiancé 10. Financial record keeping