Is your business a limited company, a sole trader, or perhaps a partnership?
And, are you and your colleagues entirely clear on the difference?
Transport solicitors can tell you numerous stories about operators that, for example, started out as a partnership and when one of the partners died or left the business, neglected to update the business entity. In many cases the operator hadn’t found out that they’d been in the wrong until they came before the Traffic Commissioner – and then they were really in trouble.
In a similar vein, solicitors will also tell you to resist the temptation of giving managers the vanity title of ‘director’ if they are not in fact a director. The title comes with more legal responsibility than the individual may be keen to shoulder.
It works the other way too – as we see fairly often in routeone Court Reports, an illegitimate controlling presence in the business will be called out by the Traffic Commissioner as a ‘de facto director’, even with the humblest job title.
The names against your business, and the entity your business is trading as, matter greatly.
But while you’re thinking about it, have you ever considered employee ownership as a business model?
It’s a type of entity, just as ‘limited’ and ‘partnership’ are, but it’s not nearly as well-known – despite the fact that it can offer older operators a way to exit the business gradually and leave their business in the hands of staff, with their legacy intact.
It’s worked beautifully for Alfa Travel – could it work for you?
Jessamy Chapman, Features Editor