Focusing on the day-to-day matters of the business can be all consuming for SME owners and entrepreneurs – as a result they could unwittingly make legal faux pas which have a knock-on effect on the business months or, even, years down the line. Adam Dowdney, a partner in the corporate and commercial department at IBB solicitors, provides some top tips for business owners looking to safeguard and minimise the risks
Shareholder and partnership agreements
Do make sure you have shareholders or partnership agreements in place to protect your business. If you don’t already, start having conversations and agreeing terms with all other shareholders, when everyone is (hopefully) getting along and circumstances are favourable. Divorce, director fallouts and life-threatening accidents may seem unlikely, but there are no guarantees. You will want to ensure you avoid the worse-case scenario of having to dissolve the business or fighting bitter legal battles in court.
Terms and conditions
Don’t get caught out by not using terms and conditions (T&Cs) for clients, customers and suppliers. Using robust T&Cs for all transactions, will protect your business and prevent it from getting involved in costly and timely disagreements. Also make sure that your T&Cs are properly incorporated in your business dealings, so they can be relied upon.
Bricks and mortar
Before signing a lease on your office property, do make sure you understand all the terms up-front, particularly around what the landlord will require for repairs, dilapidations and the terms of any break clause. Make sure your business does not get tied into a long lease without a break clause – it can be difficult and costly to back out once you have signed on the dotted line.
Do make sure you protect the intangible assets of the business. Make sure the company’s copyright is protected – this includes ownership of words and images and affects all types and parts of the business. It can range from your company’s website, blogs, other marketing material, presentation documents, photographs and films. Make sure that if you have used an external consultant or supplier that you confirm legal ownership in writing. Getting agreement over the phone will not work – should you ever have to prove legal rights.
Do make sure you get your trademarks registered. To protect your trademark, you can go online and register it with the UK Intellectual Property Office. Once you have registered it you can put the ® symbol next to the protected mark – this will go a long way to prevent competitors trying to copy it or use something very similar.
Don’t forget to incentivise and reward employees who make a great contribution to your business. Consider setting up a company share option scheme as well as giving regular bonuses (if deserved) – this could make a big difference to retaining key staff for the future development of your business. Do also make sure you have robust and up-to-date restrictive covenants in all employee contracts to ensure staff cannot take clients, customers, data or any other company information should they leave.