LawBite have provided their top tips for start up companies.
Read on for essential legal tips and don’t forget that Lawbite are offering all Start Up Loan recipients an exclusive discount for their services.
1. Shareholder agreement
If you have other founders or shareholders it is best to put a shareholder agreement in place. This regulates not just who owns what, but how the company is run – how decisions get made, what happens if there are disputes and what happens if someone wants to sell.
2. Working with consultants and employees
Put it in writing. Whether you are working with contractors, consultants or employees you need to be clear on what they are supposed to do, how long they will be doing it for, what they get paid.
As a generalisation, contractors/consultants are people who are engaged by the company to perform certain services non-exclusively and not on a full-time basis. Employees tend to work exclusively for the company.
If you are employing people there are a whole host of legislative requirements you have to satisfy too, from pensions, to disciplinary matters to non-discrimination.
You must be clear whether you are engaging someone as consultant or an employee – often people are engaged as consultants when they are really employees which can land you and them in trouble with the taxman.
3. Terms & Conditions (or T&C’s)
Whether you are trading online or offline, and whether you are dealing with other businesses or consumers, you need some standard terms and conditions in place which your customers sign up to. This applies if you are providing goods or services to another business or directly to a consumer or if you are receiving goods or services from other businesses. These regulate what you or they are supplying, how much people get paid and when, who is responsible for things that go wrong and how to handle disputes.
4. Intellectual Property
An often neglected area, because much of the value in a company often resides in its Intellectual Property (IP). Intellectual Property refers to non-physical property that you might own which is a result of your creative endeavours for example trademarks, design rights, copyrights and patents. Do you have any copyrights in software or films or artwork? Do you have any design rights in the look and feel of your business? What about protecting your trademarks or logos with a registration? Maybe you even have a patent you can protect. Check it out and protect it.
5. Acquiring Assets
Often companies use assets made or owned by other people, for example software, artwork or videos – take care of business if that’s the case by putting the right paperwork in place. If you commission software make sure you own it, and that there is a clear responsibility for delivery, bug fixes and maintenance. If you use content or materials owned by third parties make sure you have a licence agreement that gives you the widest possible usage terms, defines how long and where you can use the materials and how much you have to pay for them.
Thinking of starting a business? Check out our free online courses in partnership with the Open University on being an entrepreneur.
Our free Learn with Start Up Loans courses opens in new window include:
- Entrepreneurship – from ideas to reality
- First steps in innovation and entrepreneurship opens in new window
- Entrepreneurial behaviour opens in new window
Plus free courses on finance and accounting, project management, and leadership.
Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.