Legal considerations when starting a new business
If you are setting up a new business there are many things to consider from your website, your suppliers or your customers and insurances to name a few. However, it is also vital that you consider certain basic legal documents which should form the core of your business protections and serve as a building block for the future. These include the following:-
1. Terms and Conditions of Sale
Whether you are mainly selling over the internet or through a physical location it is absolutely vital that you have terms and conditions of business in place, which will form part of your contract with each individual customer. Terms should be tailored to the particular requirements of your business and vitally incorporate limitations of liability in the event of something going wrong. These should be consistent with the nature of your product or service and any insurances which you maintain e.g. product liability or professional indemnity.
If you trade over the internet there are even greater requirements with regard to the information you must give to your customer for example rights of return, etc. We have written terms and conditions of sale (and purchase) for many clients involved in many different types of industries, professions and trades and will be able to advise you accordingly, as well as making you aware of your obligations with trading over the internet as a result of the important changes made in the Consumer Rights Act, which will come into force in October 2015.
2. What sort of company suits your business?
Would a limited company, limited liability partnership or general partnership be the best structure to choose for your business? If you are setting up a business with anyone else, it is important to consider the type of entity which suits you best in terms of liability and which will work best when it comes to either person’s exit strategy. We can also help you to make an informed decision about this.
3. Shareholders Agreement or Partnership Agreement
If you are going into business with another person, be it in partnership or through a limited company it is essential that you enter into a partnership or shareholders agreement and that you enter into an appropriate agreement at the beginning of your business relationship. These agreements help define the authority of each partner/shareholder; deal with methods of funding and importantly, provide a formula if things go wrong. These agreements also provide the possibility of a managed exit of a partner or shareholder and how his/her share of the business might be purchased.
4. Employment contracts
If you have an employee or you are thinking about employing someone it is vital (and indeed the law) that you provide your employee with compliant terms and conditions of employment. We also provide our business clients with comprehensive terms of employment, which provide essential protections to the employer regarding confidential information and protection of your client base. This is something which is often overlooked and businesses can be destroyed by an ex-employee with client knowledge attacking your client/customer base.
5. Restrictive Covenants
In the same way that we would advise you to protect yourself from any of your employees walking away with your trade secrets by using restrictive covenants; before setting up a new business, make sure that you are not bound by any restrictive covenants in your old employment contract, which could inhibit aspects of the work that you are planning to carry out.
A trademark that has been registered through the UK Intellectual Property Office will provide your business with an identity which cannot be used or replicated by your competitors. Without a trademark, it is far more difficult to defend aspects of your business and its brand if another business uses the mark on products or services that are similar or identical to yours.
Advice about financing your business
If you require funding for your business, we can help. Whether it’s a commercial mortgage, business loan or corporate overdraft that you need, we have extensive experience in corporate finance and will be able to advise you on a variety of options.
We also have access to an extensive network of other professionals throughout the Midlands including accountants, surveyors and insurance brokers. As part of initial advice in connection with the setting up of your business we are happy to recommend other professionals appropriate to your type of business and we would be happy to make a direct introduction for you.
Legal advice for setting up a new business
If you are setting up your own business and would like to speak to an expert about the legal considerations that you need to be aware of, contact our team of specialist corporate and employment lawyers today. Contact us with any questions you may have or call your nearest office to arrange an appointment:
Leicester call us on 0116 254 8871.
Hinckley call us on 01455 639 900.
Market Harborough call us on 01858 467 181.