When starting a new company, there are many factors which directors and shareholders need to take into consideration. Formulating a business plan is very important as is getting a website designed which will promote services to potential customers. A business must also be aware of codes of practice and the laws and regulations which apply to them.

What is a business code of practice?

A code of practice enables a company to confirm its priorities and values. A business code of practice can also help a company if an employee causes offense which results in legal proceedings being brought against the company. Having a business code of practice is very important and there are many different ways in which it can be written

1) A company’s code of practice runs in accordance with a business’s principles. It is not a stand-alone message which is different from a company in any way because it works alongside a company’s mission statement. Therefore, the approaches which a company uses in their day-to-day operations should be considered when writing a code of practice.

2) The characteristics of the industry which a company specialises in should be considered when writing a code of practice. As it will be industry-specific, a code of practice can help employees with answering a particular question which is directly posed to them.

3) A code of practice can demonstrate a company’s dedication to ethical business. For example, if a business sells make-up and their products are not tested on animals, this information should be included in their code of practice.

4) Before writing a code of practice, the values which a company has should be thought about. As a company must have a well-written code of practice, they should know about the exact information which has to be included. Therefore, a director won’t regret not including a particular piece of information in their code of practice.

Laws which a business must be aware of

Although it may sound obvious, business laws help a company to know about the legal obligations which they have to follow. As there are many laws which a business needs to abide by, it can take a very long time for directors to gain a full understanding. Business laws help to protect companies from illegal acts which may be done by competitors, suppliers and even governmental offices.

Business laws normally come into force on the 6th April (start of the financial year) and the 1st October. As the UK government has pledged to help small businesses, they have provided help in the form of a memorandum on new domestic regulations.

What is a memorandum on new domestic regulations?

Helping small businesses that have fewer than ten employees, which are otherwise known as micro-businesses, a memorandum on new domestic regulations was introduced by the UK government on the 1st April 2011. From this date forward for three years, any regulations which are imposed under the ‘one in, one out rule’ will not be applied to micro-businesses. When a governmental department wishes to introduce new regulations, consideration must be made about the impact which this will have on micro-businesses.

Regulations which are applicable to hiring new employees

Hiring an employee can be an exciting phase in the life of a company because growth may have been reported and, therefore, they can increase their workforce. However, there are many laws and regulations that are applicable to employees which have to be followed:

–          Contracts. Before an employee is given a contract, it must be explained to them that what they are about to receive is a legally binding document. An employment contract must be given to the person who it is addressed to within two months of starting a position. Such information which must be included in an employment contract is their job title, duties and responsibilities, their rate of pay, holiday entitlement and the amount of notice which has to be given.

–          Discipline. A company should have disciplinary and grievance policies in place which can tell employees about vital information that they should know about. The name of a manager should also be included as well. Therefore, employees will know who they can lodge a grievance with. Such policies can help companies to know whether an employee should be given a warning. Disciplinary and grievance policies can also help a business to identify troublesome employees so that their actions can be monitored.

–          Anti-discrimination measures. A company should not discriminate at any point. From the stage of interviewing people who have been shortlisted to when employees have worked at the same company for years, employees should not be discriminated at all on grounds of race, age, gender, nationality, sexuality, marital status, parental responsibilities or on their political beliefs. Job adverts must be open to all participants and it can’t detail the people who shouldn’t apply.

When a company knows about codes of practice as well as applicable laws and regulations, they can be successful and will also know what they are legally obliged to do.