Business Law Updates

Issue 1 - July 2013

The importance of Shareholders Agreements

Most people operating a limited company should sign a Shareholders Agreement. The agreement will not only deal with day to day matters for the running of the business, but will also deal with more important matters which can or may happen during the life of the business. This may seem like something which is not absolutely necessary, but can prove to be invaluable when there is a difference in opinion. What does it cover? How the parties resolve disputes for example deadlock in the event of equal shareholdings Restrictions on selling shares to outsiders What happens in the event of death/incapacity of a shareholder How shares are to be valued in the event of somebodys departure Any restrictions placed on shareholders leaving the business. The Agreement might also deal with shareholder insurance - the taking out of insurance by the company to pay out in the event of the death of a shareholder, enabling the company to purchase the shares of the deceased shareholder. I have dealt with many small businesses when things go wrong and dealing with any of the above issues without the benefit of a Shareholders Agreement can end up costing a lot of money to get things sorted out. So many times my clients have said I just wish I had this sorted at the beginning! They are not as expensive as you might think and I do these for a fixed fee which means that you know from the start how much its going to cost.

Identifying and Protecting Intellectual Property Rights, follow the pattern to get it right
Generally speaking, if you create something - you or your business will own the intellectual property in it. You need to make sure that you have followed the correct process for identifying what these rights are and also how to protect them. This is likely to have particular relevance to you when it comes to:

Brand or Logo

Products

Website

Brochure

Photographs

Illustrations

Software

Protecting the IP of your business will require the ability to: Stop/limit other people using what you have created without your permission Charge other people for using what you have created. The type of IP protection that your particular business will need will depend on the nature of what you have created. It can be very confusing for small businesses and you need to make sure you have covered all the bases..

Business Law Updates

Issue 1 - July 2013

For example, inventions are protected by patents, whereas literary works (brochures and so forth) are protected by copyright. The Intellectual Property Office has a very informative website www.ipo.gov.uk, which will help you identify which type of protection is required. When registering a trademark, one point to note which is sometimes missed is making sure you are registering your mark in the categories of goods and/or services relevant to your business. You will be charged for each category so its important to get it right or get someone to do it for you.

Your pension obligations as an employer

As part of the Governments plans to encourage people to make financial provision for their own retirement, all employers will have to provide workers with a workplace pension scheme over the next few years (this began in 2012 for larger companies).

Terms and conditions - a boring necessity

When drafting terms and conditions (T & Cs) for your business it is important to make sure that they take account of:1. The nature of your product and/or service 2. Whether your customers are purchasing goods/ services for personal use (i.e. as consumers) or for business purposes. Where you are supplying your goods and/or services to consumers, there is a wide range of consumer legislation which needs to be considered in relation to such matters as the extent to which you can limit or exclude your liability 3. Statutory provisions for example Long Distance Selling Regulations/Data Protection. Remember that one of the main reasons that businesses cannot rely on their own T & Cs is because they cannot demonstrate to a court that the T & Cs were brought to the attention of their customers before doing business. It is important that customers are given the opportunity to agree to your T & Cs before they do business with you, and that - if possible - you have an acknowledgement from your customers.

The date when the law is switched on for your business is known as your staging date. It is a requirement for businesses to offer workers a workplace pension scheme before your businesss staging date. All workers must be enrolled into the scheme who:1. Are aged between 22 and the state pension age 2. Earn at least 9,440 a year and are free to work in the UK. Every employer must make an employers contribution to the pension scheme for these workers. This is something which you might want to consider when making financial decisions.

If you would like us to focus on any particular area of law next month, please let me know. Tel: Email: Web: 0808 175 8000 enquiries@slatergordon.co.uk www.slatergordon.co.uk