There seem to be a million and one things to address when starting your own business…
However, creating the right legal framework and ensuring that you, your business and its assets are protected, is vital for the start-up to achieve its full potential.
Here we address just three of the key most important questions:
What kind of business setup is best? If there is a level of risk associated with your product, a limited company may be best. If you are starting a business together with someone else, have you truly addressed what roles and responsibilities each of you have, how will you fund the transaction, will that funding be equal, are you equal partners in terms of sharing the profits, are you to be paid a salary, do you have an agreement on what will happen if major decisions are to be made, what happens if one of you decides the going gets too tough and wants to leave.
These are all things that need to be considered now and a simple shareholders agreement is money well spent now, as against your business partner leaving with all your customers and contacts and setting up in competition, with impunity down the line.
Whilst you will no doubt have secured the right kind of insurance for your business, once you are trading, you will be entering into contracts with customers and suppliers on a regular basis. You need to be clear about payment terms and liability for your product.
If you have no written terms, the Sale of Goods Act will import implied terms into your relationship, which are likely to be more onerous than those you might negotiate in a set of terms. If you are selling online, you need to comply with legislation, particularly if you are selling to consumers rather than business-to-business. A proper use of terms and conditions of trade will help you with this to avoid and resist unwanted claims and liability that could cripple your business.
Do you understand who owns your intellectual property? All businesses have some intellectual property, whether it is a domain name, logo, a design, a written report or something more technical, like know-how or patented technology. You need to ensure that if you are operating through a limited company, the company clearly owns the products of your team. If your practice is to engage consultants rather than incur the expense of full time employees, you are more exposed and could be held to ransom by consultants claiming that he has originated the work you have paid him to produce for you.
You should sit down with your advisors who are very experienced in setting up firms like yours. Businesses also fail because they have focused purely on the operational aspects of getting a business started, without addressing the fundamentals. As a specialist commercial law firm, we have been helping businesses for over 25 years with their legal requirements and can provide invaluable support in this initial set up phase. We have an affordable start up pack, which addresses all the fundamentals on a cost effective basis. If you have any questions on how best to protect your business and how to avoid the pitfalls down the line or would like to discuss our start up pack, please contact
Elaine Hurn on
01254 297900 or via email [email protected]
