Setting up your own architectural business for the first time can be an exciting, if daunting challenge. No matter what business structure you intend to create, there will inevitably be different issues for you to face than those if you were an employee at someone else’s practice.
The first step will be for you to decide what kind of business it is you will be running, and then understand the legal responsibilities that will flow from that choice. The government provides detailed guidance on such matters for all those people considering setting up a new business (https://www.gov.uk/browse/business/setting-up), so this guidance note will focus on issues specific to being an architect.
The name of your business
Careful consideration of your business name is recommended. It must not be misleading – the use of the plural ‘Architects’ is not precluded from sole traders, the impression that more than one architect is in situ when there is not is unacceptable (for example ‘Jones & Smith Architects’ when Mrs Jones is an architect but Mr Smith is not).
While you do not need express permission to use the word ‘Architect(s)’ in your trading name, you will need a letter of permission from ARB to register it at Companies House. Further details can be found on ARB’s website under Company Formations.
Please do remember to update any new details of your practice name and address on the Register.
Professional Indemnity Insurance
All architects in practice are expected to have adequate and appropriate professional indemnity insurance in place to cover their liabilities. As the owner of a business it will be your responsibility to ensure that proper cover is in place to cover you, your business, and any employees.
Undertaking work yourself is a significant commitment, in that you will likely be liable for at least six years, and so will need to budget for future insurance premiums.
ARB has published specific guidance on PII, which can be found here.
It may be pragmatic and efficient to have a number of standard documents prepared.
It is imperative that you provide all clients with your Terms of Engagement, and while they will vary from project to project, you may find that drafting a standard template which will allow you to fill in additional details will save you much time. There are a number of standard documents you can purchase; however if you want to draft your own then it should cover the main points found within Standard 4.4 of the Code of Conduct. At the very least it should always be covering the scope of the work; the fee (or method of calculating it); who is responsible for what, and what will happen in the event of a dispute. There may be other legal requirements depending on the nature of the project. You may be well advised to have your standard terms checked over by a lawyer, for they will be invaluable if you ever run into a dispute with a client.
Architects are also expected to have a complaints procedure, even when they are a sole trader. This does not have to be a complex document, but simply set out who will deal with any complaint about the practice, and the procedure for doing so.