Frettens’ Commercial Team guides businesses from a start-up right through to decisions about selling and assist with many things in between.
All business owners realise that, on some level, that it is vital to protect their business, and most appreciate that it can be a false economy to avoid spending on putting the right protection in place. Karen Edwards, Solicitor and Associate in the Commercial Team was asked to speak at a recent networking event for female entrepreneurs, giving an overview on elements to consider to protect the business and how to protect yourself in business.
Here is a summary of her guidance in protecting the business.
- Suitable Terms & Conditions
It is crucial to make customers aware of terms on which your business trades asthis can avoid disputes arising in the future. They cover a range of issues but probably the most pertinent is stating how long a client has to pay their bill and the ability to charge interest on late payment, whilst also limiting your liability as the provider of goods and/or services.
- Register your trademark
It is vital to register your trademark to protect it. If you don’t, you risk a trademark troll registering your trademark and holding you to ransom by attempting to sell it back to you at an inflated price. Registering a trademark does not mean that you own the domain name for your brand name and many businesses have fallen foul of domain name squatters who register a domain name that would be the obvious choice for your business, also in order to attempt to sell it to you at an inflated price. To recover a domain name from someone who has registered it in bad faith, you must have the trademark registered and prove the domain relates to goods or services specified in your trademark registration. All of these things can be costly to put right and also eat into the true value of a brand if you attempt to sell your business.
- Employment Contracts
Regardless of how many employees you have, to comply with the law every employee must have a contract. This also protects you if an employee attempts to make a claim against you. Our Employment Team can provide full details and assistance with this. If you work with someone who is not an employee, they should have a sub-contractor / consultancy agreement. This ensures both of you know who is responsible for paying tax (the consultant) and that they do not obtain any employment rights whilst working for you.
- Protecting your goodwill
This basically means formally restricting what employees (or shareholders) do when they leave your business; they are known as restrictive covenants or trade restrictions. Without them, it can be easy for someone to copycat your business and simply take the customers with them. These can include:
- Confidentiality - not to divulge confidential information, such as customer lists, trade secrets, finances.
- Non-competition - usually applicable to a set period of time following their departure and within a geographical radius from where the business operates.
- Non-solicitation - cannot entice away employees, customers or suppliers.
- Non-dealing - even stronger than non-solicitation, whereby they cannot assist the customer or supplier even if the customer or supplier approaches them.
Both non-solicit and non-deal clauses also need to apply for a reasonable period of time and cannot be too restrictive.
- Social media - might also be restrictions during and after employment about what can be posted on social media by the employee / shareholder.
Karen comments “These are just the headlines of what a business owner needs to consider – there are also licences and consents, complying with other laws such as health & safety, sufficient IT & cyber protection, insurance and property leases. The potential protection a business needs in place is vast and can seem incredibly daunting for someone operating a start-up business. We are happy to speak with people from the outset and begin getting the fundamental documentation in place and developing this as the business grows.”
All of these considerations protect your business, but you must also protect yourself in business. Next month we will report on this, but in the meantime, our Commercial Team is happy to discuss any issues that this raises for your own business. If you have any questions, you only have to ask us at Frettens. Please call 01202 499255 and Karen or her team will be happy to chat about your situation and your particular requirements.