If you’re a start-up, or an experienced business owner, use our commercial checklist to help you build a better business.
Choose the right business structure
Think:
Co-founders
Investors
Liability
Tax
Get professional advice early. We can advise you on your options, help register your company for you and help limit your liability and your tax bill. Issues that can otherwise arise include: Having to restructure later and vary all of your contractual arrangements, costing you time and money.
Choose the right sources of finance
Think:
Personal sources
Private sources
Public sources
Industry specific options
Will you fund this personally and how much? Will you approach friends and family? How will you value the company? What legal obligations regarding fundraising will you need to comply with, including FCA regulation? Will you seek capital from external investors? How will you negotiate your term sheet? What advice do you need on carrying out financial promotions? Will you seek lending from banks or other commercial lenders? Will such lending be secured or unsecured? Are there other charge holders to consider? What grants and government reliefs are available?
Choose a business name and protect your brand
Think:
Your brand and what it represents
Future growth
Domain name and website
Trade mark registration
Think of something distinctive, that makes you stand out, can attract trade mark protection and that you could adapt to cover future products and services. As a business, your trade marks are one of your most powerful communication tools that you have and can add significant value to your business.
Carry out wider checks on search engines and at Companies House and the Intellectual Property Office. Do you need advice on whether and how your business name can be protected? Will you want to protect your brand in the UK, in Europe or globally? Do you need advice on how Brexit impacted your IP, and in particular your use of domain names in the EU? We can advise you on appropriate searches and help you protect your name and brand through registration in the correct places. We can also help you to take action to enforce your rights against infringers.
Have your contracts in order
Think:
Co-founders
Employees and consultants
Suppliers and customers
Investors and shareholders
Put everything in writing. Formalising all of your arrangements and agreements provides peace of mind. Ensure that your business is protected and able to enforce its rights, should any issues arise later on.
If you have co-founders, do you have a shareholders’ agreement in place? Do you have a signed and dated copy? Does it need updating? Do you understand its terms in order to renegotiate in the future? Do you and your co-founder(s) have employment contracts in place? Do these deal effectively with restrictions on exit and protection of confidential information and IP? We can help to make sure you have the right contracts in place.
As an employer, do you have agreements with employees to cover your legal obligations and their duties? Have these been updated in light of the pandemic, for example with remote working provisions? Do you have agreements in place with clients and suppliers? Do they need updating? If you transact with consumers, you need to offer greater protection under the law. Do your terms adequately cover this? If you buy goods and services to sell on, do you legally own them? Do your terms with suppliers adequately cover delays, especially in these current times? What are your cancellation rights?
Are you seeking investment? Have you taken advice on proposed heads of terms? If you are offering shares for services, are there clawback provisions? Does your agreement deal with secondary fundraising? How does investment impact your board structure? As a founder, do your contractual documents protect your shareholding from any future conflict?
Plan for the present and future. If you want to grow and expand and offer new products and services – how will your contracts need to change? What if you need additional investment?
Choose the right premises
Think:
Location
Working from home
Retail or office space?
Rental terms
In this evolving economic climate, working from home has become the new normal. If you have a lease or licence, what are the termination provisions? Can you renegotiate the rent or the term? Have you carried out risk assessments? Are you complying with your legal obligations in respect of working from home? If you are in an industry which is “locked down”, can you exit your lease?
If you do need premises: What type do you need and where? What terms is the landlord offering? Do you understand how to negotiate the terms going forward? Can the landlord increase the rent and when? Who pays for repairs? How do you exit? Is there any flexibility on terms?
Choose the right insurance
Think:
Products and services
Risks needing cover
Third party liability
Protecting employees
Insurance is critical and often a legal obligation. Consider the risks you need to insure against and put in place the right insurance cover which ties in with your liability as set out in your business contracts. For example, you may need occupiers’ liability insurance, public liability insurance and employers’ liability insurance. You may also need insurance as a business tenant. If you are providing professional services, you may also be required to secure professional indemnity insurance with the assistance of specialised brokers. Insurance brokers can help with the above and we can provide you with access to our trusted relationships.
Know your duties
Think:
Duties as a director
Record keeping
Data protection
Employees
When running a business, there are a number of legal duties to be mindful of and to comply with. Your specific duties will depend on your business structure, industry and products and services.
As a director of a company you need to comply with your statutory duties, including to act in the best interests of the company and to avoid conflicts of interest. This is particularly important if you find yourself in a dispute with a co-founder, when allegations of misconduct often come to the fore. What records you need to keep at Companies House and with HMRC and for how long?
Data protection is incredibly important given the amount of data that is collected and transferred in any given business. What data do you collect? Is it sensitive? How long do you keep it for and to whom do you disclose it to? Do you have adequate safeguards in place, particularly for international transfers of data? Do you know where your servers are?
As a business you will have different obligations in respect of employees, consultants and workers. These relationships are not always clear at the outset and care should be taken when entering into contracts. For example, you do not always own the IP of consultants’ works and workers could in fact have the same rights as employees depending on the circumstances. Your contracts should accurately reflect the reality.
We can explain your duties and help you put the right documents in place to ensure you are legally compliant and protected – freeing up your valuable time and affording you peace of mind.
We are here to help you build a better business.
Contact us on 020 3709 9673 or enquiries@fortunelaw.com.
Clink link to our contact form here
