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Setting up a business is an exciting time but without the right legal advice it can also be a legal minefield. Prevention is better than cure. A specialised business solicitor can help you identify future legal problems and advise you on what steps to take to prevent problems before they happen, which will protect your business from risk and save you money.
Solicitors can advise you so you make the right legal decisions to make your business successful as you grow. Business solicitors can provide business legal advice about the following:
The structure of your business is vital to your success as you start up and expand.
If you are going into business with other people, you might need a shareholders' agreement or partnership arrangement to make sure you get a fair return for your financial or non-financial investment. Your solicitor can explain the different options and advise on the best one for your business - partnership, limited company or limited liability partnership - and can even set up the option you choose.
When choosing premises for your business, it is important that you fully understand the terms of the lease. Can the landlord increase the rent? If so, by how much? Will you find yourself paying ever-increasing service charges? Will you need planning permission for a change of use? If you choose to run your business from home, what are the restrictions? Your solicitor can help you with all these business property questions.
You may also want to find out what sources of finance are available and what their legal implications are. Should you mortgage the family home? This can have major legal implications. Are lenders insisting on unfair terms? Could you be getting a better deal with your bank? Your solicitor will explain these areas and can even help negotiate finance on your behalf.
Your solicitor can also give you advice on issues including the tax implications of different business models and the best time to start your financial year.
When buying or selling goods and services, it is important to know your legal duties. What could contract terms mean for your business? What about product liability? What can you legally say in adverts and promotional materials? A solicitor can cover all these points in detail and, if necessary, refer you to a specialist.
Intellectual property (IP) refers to ideas you create and legally own. Example of IP can include inventions, literary and artistic works, designs, symbols, names and images.
Your solicitor can help you protect your designs from competitors who may want to steal your ideas, whether it's copying your trading name and logo or the products themselves. By owning your designs, you can make money from them by allowing other people / companies to use them or at a later date you could sell them to someone else.
It is important that, if you are using other people or agencies to create anything for your business, that your contract states that you own the IP of anything they create (or you have the legal right to use it as you wish).
Employment law is a complicated area and is constantly changing. Most employment disagreements are caused by badly-drafted service contracts or dismissal procedures that don't meet legal requirements. Your solicitor can check on your contracts and procedures to prevent these kinds of disagreements and help protect you from employment-related legal action.
In business you need to plan for all possibilities. What if you fall out with a partner or fellow shareholder? Can you be forced out? How can you use a mediator to resolve disputes? How do you make sure that responsibilities and profits are divided fairly? What will happen to your business if you become ill or die? Will your assets be protected? Your solicitor can cover all these questions with you and advise how to protect your interests now and in the future.
If you would like members of your family to inherit your business after you die you'll need to make a will. Your solicitor can also help if you would like to transfer ownership of your business before you die (for example, if you retire).
If you decide to sell your business, your solicitor can help you in a number of different ways.
Solicitors can draft confidentiality agreements to make sure all the information you are sharing about your business (prices, profits, customer lists) is not shared with other businesses / people.
They can also make sure that when you sell the business there are no outstanding legal issues you need to deal with in the future. They can make sure your buyer is responsible for paying all contractors / suppliers after you sell your business.
Solicitors play a key part in due diligence, a complex and lengthy process where the business is investigated for a range of things including fraud, outstanding legal issues and to check all the information provided is correct before the seller buys the business.
To find a solicitor who can help you with your business, visit the Law Society's Find a Solicitor website and search under "Company and Commercial" to get details of your nearest business solicitor.
Look for Lexcel - the Law Society's quality mark in managing a legal practice. Firms that have achieved Lexcel commit to effectively managing the risks in providing legal advice and delivering consistent levels of advice and client service.
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An information leaflet on business law is available in the following formats:
The Law Society offers a service for small or medium business owners that can put you in touch with a local solicitor who can talk you through your legal issues in a free 30-minute consultation.
Find out more about Lawyers For Your Business
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While we have made every effort to provide accurate information, the law is always changing and affects each person differently. This information is no substitute for specific advice about you personally and we will not be liable to you if you rely on this information.