Legal requirements of small businesses
20th April, 2015
Hugh Strickland, Corporate & Commercial Partner and Amanda Wickstead, Corporate Solicitor, both deal with businesses on a day to day basis.
Here they answer some of questions on the legal requirements of small businesses, picking out specific points in a company’s growth where legal advice at the outset can save a lot of problems later.
Have your Terms and Conditions been reviewed by a legal adviser?
In contracts with your customers and suppliers, whose terms prevail? Yours or the other party? A thorough check of your payment terms and ensuring they are adhered to can really help with cash flow.
Are you thinking of taking on a partner or making an employee a director?
A shareholder agreement is really important – it sets the terms when things are going well and includes the ‘rules for falling out’ if things go wrong.
Are you ready to take on an employee?
As well as being mandatory, contracts of employment protect the employer as well as the employee. Restrictive covenants prevent an employee who has learnt all he can about your business from setting up in competition next door.
Take legal advice before implementing any change.
The only certainty in business is change but change is fraught with pitfalls. A sound legal structure can help ensure change is for the better.
Protect your intellectual property
Your own personal brand is how your business is recognised and companies are very protective of their brand. Take legal advice on registering patents and trademarks and protecting your brand. Researching brand names before finalising a name can save a fortune on domain registrations and marketing.
Copyright and Licences
Software development – who owns software you have paid for? Generally, the developers own it so have licensing rights. If your employees create it, it’s yours but if sub-contractors develop it, it may be theirs. Legal agreements can make this clear.
Who gets your business if something happens to you?
A business is often the single biggest asset when someone dies and this is likely to increase the combined asset value to over the £650,000 threshold. Legal advice well in advance can ensure that your family and your business are properly looked after should something happen to you.
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