This post is a guest publication created by Sparqa Legal.
Every business is unique. They have different strategies and goals and face their own unique challenges. Yet whilst there is no one size fits all approach when it comes to running a business, there are steps that all businesses can take to protect themselves both now and in the future. This is important because failing to effectively manage your business’s risks can have serious consequences, from reputational damage and fines, right through to criminal convictions and even imprisonment in the most serious cases.
Whatever stage you’re at, we’ve set out some key steps you can take to protect your business from legal risks and maximise your chance of success as you grow.
Incorporate as a company
If you haven’t done so already, incorporating as a company is nearly always the best option for your business. It separates your business’s finances from your personal finances, which helps to protect your assets if things go wrong. It can also make your business more attractive to outside investment and/or for trade credit purposes.
Incorporating as a company is a straightforward process and you can do it yourself by sending an application to Companies House.
Once you’ve incorporated, you’ll have certain ongoing legal obligations to keep on top of. These include keeping up-to-date company registers (e.g. of directors and shareholders) and meeting certain filing deadlines, including for your statutory accounts and confirmation statement. It doesn’t take much to get your house in order, but it’s important to make sure that you do. In many cases, failure to meet your obligations is a criminal offence, punishable by fines levied against your company and its directors. Having disorganised, incomplete or out-of-date records could also make a poor impression on potential lenders, investors or buyers further down the line.
Register your name and logo as trademarks
This is an important step to take to protect your business’s brand; it will ultimately prevent others from profiting from your hard-won goodwill, which is often a valuable asset for your business. Registering your name and logo as trademarks will reduce the risk of them being copied by others and make it easier for you to enforce your rights if someone does try to copy your brand. A trademark provides you with the exclusive right to use the name and/or logo that you’ve registered for 10 years, and you can subsequently renew it as many times as you like.
You can apply to register a trademark yourself and the application process is typically straightforward.
Use proper terms of business
There are real benefits to putting in place written terms of business, whether these take the form of standard terms and conditions for your goods or services, or bespoke agreements setting out how you will provide your services.
Written contracts will ensure that you and your clients or customers are on the same page about what has been agreed, including when and how your goods or services will be provided and what your payment terms are. This will not only help to avoid prolonged disputes if things go wrong, but will potentially also improve your cash flow by preventing any confusion as to when and how payment should be made. Written terms of business also help you to comply with your legal obligations, for example by setting out how your business complies with important consumer protection laws.
Make sure your website is legally compliant
Ask for an NDA
As part of running a business, you will often need to disclose sensitive confidential information to other people (such as investors, suppliers, partners and consultants). It’s important that you take steps to protect this information as best you can, which means not only minimising the amount of confidential information you provide, but also asking the recipient to sign an NDA (a non-disclosure agreement) before you disclose it. This can be a powerful deterrent against misuse of your confidential information and will help you to take action in the event that it is misused.
Look after your staff
Whether you’re already an employer or you’re looking to take on your first employee, hiring staff is a big investment and a key step in driving forward the success of your
business. Your staff are an important asset and you should take steps to look after them, ensuring you know what your legal duties are.
You are under various legal obligations as an employer, including to take out employers’ liability insurance, protect your staff members’ health and safety and to enrol certain staff into a workplace pension scheme. You should also use written contracts and put in place proper HR policies, as you’re legally required to give employees and casual workers certain key terms and conditions on or before their first day of work.
Sparqa Legal’s Q&A will guide you through your legal obligations as an employer, from hiring staff and preparing staff contracts, right through to handling grievances and disciplinary action and dealing with staff resignations.
Take the legal health check
If you want to properly manage and minimise your business’s legal risks, it’s important for you to identify where your business is exposed. Sparqa Legal’s free legal health check will tell you whether your business is in good legal health and will help you to identify any weak spots and how to address them. Remember that unknowns can be costly if legal problems slip under the radar.
The content in this article is up-to-date at the date of publishing. The information provided is for information purposes only, and is not for the purpose of providing legal advice. ©Sparqa Limited 2021. All rights reserved.