Running your business

Running your business

 

When you are running your business, you want to be focused on the things that make you money, and not worrying about non-core functions such as legal. That being said having an understanding is key. 

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This section covers a number of different legal matters that might come up while you are running your business.

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Hiring & Managing Employees

Software Development Agreement

What is it? Software is intellectual property. A software development agreement is an agreement between a business or an individual and a developer by which the individual or business hires the developer to create and deliver a specific piece of software. Why is it important? This agreement is important as it clarifies the relationship between the developer and the hirer or employer. Risks When you engage a software developer if you want the software created to belong to your company or to you, you must ensure that you agree and insert an ownership clause in the agreement. If there is no ownership clause the software created by the developer will automatically belong to the developer even if your company has spent millions of pounds developing the software.



Freelancer Agreement

What is it? You may use a self-employed freelancer to do a specific task eg work on a project, design your website or do your marketing for a specific period.The standard contract used to hire a freelancer is a consultancy agreement. This agreement clarifies the basic terms of your relationship with the freelancer eg the work to be done, fees payable and other terms of the agreement eg a non-solicitation clause, confidentiality clause, data protection, ownership of any intellectual property created by the freelancer, indemnification clause for any losses you incur due to the freelancer’s breaches of third party intellectual property. Etc. A company consultancy agreement is used to hire a freelancer who operates through their own limited company. An individual consultancy agreement is used to hire a freelancer directly. Why is it important? More specialist freelancers may want you to sign up to their own bespoke terms and conditions when you instruct them. If that is the case you must ensure that you check all the clauses carefully to ensure that they do not conflict with your requirements and that you are happy with the terms eg consultant to be liable for breaches of your Intellectual property and third party intellectual property, confidentiality, fee payable, data protection, indemnification clause etc. Risks You should also ensure that you are aware of the IR35 tax rules. If a freelancer is providing services to you through a company your arrangement may be subject to the IR35 tax rules. This means that the freelancer may have to pay tax and national insurance as if they were employed by you. HMRC has a useful tool at www.gov.uk to enable businesses check employment status for tax purposes. From April 2020 if you are a medium or large business the responsibility for determining whether the IR35 tax rules applies to the consultancy and for payment of the income tax and national insurance on behalf of the freelancer lies with the company to whom the freelancer provides the services. If you are a “small business” (i.e. a business which satisfies two or more of the following requirements – i) a turnover of £10.2 million or less, ii) no more than 50 staff and iii) a balance sheet f no more than £5.1million the responsibility for determining whether the IR35 tax rules apply and for payment of the tax and national insurance lies with the freelancer.



Internship Agreement

What is it? An intern may be a volunteer, a worker or an employee. An internship agreement is an agreement between an intern and an employer where the intern agrees to provide their services in exchange for training provided by the employer or business with no expectation that the internship will result in employment with the business. Why is it important? If your intern will just be shadowing staff and will be unpaid you won’t need a contract but it is good practice to send your intern a letter confirming the agreement terms. If you want your intern to work for your business rather than just shadow staff your intern will either be an employee or a casual worker. Risks You must have a proper contract for their status and treat them accordingly. If your intern is an employee or a casual work you must pay them the national minimum wage(NMW). If you do not pay them the NMW you are at risk of HMRC prosecuting you or the intern suing you in court.



Staff Handbook

What is it? A Staff handbook is an important living document for your employees that sets out your company’s operational policies, values and culture for current and future employees. There is no legal obligation to have a staff handbook, however as there are certain policies that you must give your employees by law (eg disciplinary and grievance policies and health and safety policies) it is best practice to start a handbook when you hire your first employee as it sets expectations for what behaviour is acceptable and desirable across your business and can protect you legally. Why is it important? A staff handbook can be contractual or non-contractual(i.e. binding or non-binding). It is best practice to make it non-contractual so that you can change it at your discretion without having to consult staff. Make sure you keep your handbook updated to reflect the law and ensure that the issue date is clearly shown on the handbook. Risks If you do not have a staff handbook and you are in dispute or engaged in legal proceedings with an employee it will be more difficult to verify your policies and procedures.



Job description

What is it? A job description sets out the scope of the role (i.e. duties and responsibilities), any skills, experience and qualifications required, the ethos and culture of your business, salary and other staff benefits. It is important as it helps you clarify what you are looking for and will also help candidates determine whether they have the skills and experience for the role. Why is it important? Always review your job description before every recruitment exercise to ensure it accurately describes the job in question. Failing to do so may dissuade suitable candidates from applying or encourage unsuitable candidates to apply. Risks It is essential that you avoid using discriminatory words in your job description eg “bright, energetic, young man” or “ an Italian” person when you actually require someone who speaks Italian as these would indicate a preference based on gender, disability, age and ethnicity.



Job offer letter

What is it? You should always confirm a job offer in writing and ask the candidate to confirm their acceptance of the offer. Why is it important? A job offer letter is a letter offering employment after an interview and summarising the basic terms of employment (if you are providing the employment contract with the offer letter) or summarising the main employment terms (if you will not be providing the employment contract until a later date) Risks Always ensure that the offer letter specifies the conditions to which the offer is subject eg “subject to satisfactory references” and that you retain a signed copy of the offer letter and contract in the staff member’s personnel records.



Non-executive director letter of appointment

What is it? This is a formal letter appointing a person as a non-executive director of a company. It sets out the key terms of the appointment and the director’s duties and responsibilities. Why is it important? As a director is more likely to be exposed to confidential information and have more responsibility this contract will include clauses which help to protect the business’s interests eg garden leave, confidentiality, non-solicitation clauses and restrictive covenants.



Senior employment contract

What is it? This is a more complex contract of employment between a senior employee or director/executive and an employer . It sets out the employment terms and conditions of employment and the standard areas of the employment. Why is it important? As a senior executive is more likely to be exposed to confidential information and have more responsibility this contract will include clauses which help to protect the business’s interests eg garden leave, confidentiality, non-solicitation clauses and restrictive covenants and ensure any intellectual property created by the employee belongs to the business.



Zero hours contract

What is it? This is a casual agreement between an individual and a business where the worker works “as and when” the employer needs the labour. There is no guarantee of any set hours and the worker is not obliged to work the hours offered. Why is it important? A zero-hours contract should be used where the business simply wishes to hire a worker on a casual basis and would benefit from not having to give the worker a guaranteed number of hours and days of work. This contract is useful for seasonal work or special events eg in the agriculture business, hospitality and catering business; when a business is entering a new market and is unsure of how many staff members it will need; in cases of unexpected absence from work eg to provide cover where there is sudden sickness or absence from work etc. They are often used in the healthcare, agriculture, hotels, restaurants and education sectors. In the UK workers operating under zero-hours contracts are entitled to rest breaks, annual leave, sick pay and protection from discrimination and must be paid the national minimum wage for hours worked. Risks Zero-hours contracts are controversial due to the uncertainty of the work and the fact there is no guaranteed employment. They do however serve a purpose by providing a flexible labour market and a route into more permanent employment. You should ensure that your zero-hours contract clearly sets out your employee’s employee status, rights and obligations.



Consultancy agreement

What is it? A consultancy agreement is a contract between a self-employed person (Consultant) and a customer requiring the consultant’s services.It is similar to the standard contract used to hire a freelancer. Why is it important? This agreement clarifies the basic terms of your relationship with the freelancer eg the work to be done, fees payable and other terms of the agreement eg a non-solicitation clause, confidentiality clause, data protection, ownership of any intellectual property created by the freelancer, indemnification clause for any losses you incur due to the freelancer’s breaches of third party intellectual property. Etc. More specialist freelancers may want you to sign up to their own bespoke terms and conditions when you instruct them. If that is the case you must ensure that you check all the clauses carefully to ensure that they do not conflict with your requirements and that you are happy with the terms eg consultant to be liable for breaches of your Intellectual property and third party intellectual property, confidentiality, fee payable, data protection, indemnification clause etc. Risks You should also ensure that you are aware of the IR35 tax rules. If a freelancer is providing services to you through a company your arrangement may be subject to the IR35 tax rules. This means that the freelancer may have to pay tax and national insurance as if they were employed by you. HMRC has a useful tool at www.gov.uk to enable businesses check employment status for tax purposes. From April 2020 if you are a medium or large business the responsibility for determining whether the IR35 tax rules applies to the consultancy and for payment of the income tax and national insurance on behalf of the freelancer lies with the company to whom the freelancer provides the services. If you are a “small business” (i.e. a business which satisfies two or more of the following requirements – i) a turnover of £10.2 million or less, ii) no more than 50 staff and iii) a balance sheet f no more than £5.1million the responsibility for determining whether the IR35 tax rules apply and for payment of the tax and national insurance lies with the freelancer.



Employment contract

What is it? An employment contract is an agreement between the employer and employee setting out the rights and duties of the employer and employee. An employment agreement is vital as it forms the legal relationship between the employer and the employee. Why is it important? If you have employees, you are legally obliged to provide them with a written statement of their basic terms of employment in writing no later than two months after they start work. From 6 April 2020 this obligation will extend to casual workers and all new employees must be provided with this written statement and additional information on or before the staff member’s first day of work. Risks If things go wrong an employment agreement will clarify the legal relationship between the employer and employee and will help the court or tribunal in providing a solution in the event of a dispute between the employer and employee. Think of an employment contract as your passport to nurturing good employment relations with your staff and running a good, progressive business. If your employee will be part-time do note that part-time staff and fixed term staff (temporary employees) must be treated equally with full-time staff. This means that a part-time or temporary employee on the same role must get the same pay or benefits as a comparable full-time member of staff pro-rated for the length of time they will be with you. Comparable employees are those doing the same or broadly similar work at the same place of work or at a different location.



Change to employment terms letter

What is it?

As an employer sometimes you may have business reasons that means you need to change your employees terms and conditions of employment (eg basic rate, overtime, bonus, working location, duties and responsibilities, hours/days of work, holiday or sick pay entitlement). This is called a “variation” of the contracts of employment.

Why is it important?

You can only do this if (a) you have a provision in the contract that allows the change. This clause is usually called a “flexibility clause” and may be in your contract or Company Handbook. (b) the employees agree the change or (c) the employees representative eg a Trade Union agrees the change.

Risks

You must have sound business reasons for making any change and follow a fair consultation procedure with your employees before you introduce the changes. If the employees do not agree the change and you believe that it is a reasonable change you can force a new contract on your employees. However, this should be used only as a last resort as it could lead to an employee raising a grievance and ultimately a claim to an Employment Tribunal. Once the change has been agreed you should ensure that each employee signs the new contract to confirm the employee has accepted the change and that you keep a copy.

Please contact our employment solicitors if you are thinking of making a change to your employment contracts.



Working time directive opt out letter

What is it? The Working Time Directive prevents employees from being forced to work more than 48 hours per week unless they freely agree to opt out of the directive. To opt out of the 48 hours limit your employees can sign an “Opt-out of the Working Time Directive Agreement”. Why is it important? This is an agreement between an employer and a worker or employee for the purposes of the Working Time Regulations 1998 whereby the employee or worker agrees to opt-out of the maximum weekly working time limit of 48 hours for a period or indefinitely. Such agreements are usually signed by doctors, police officers a, long-haulage truck drivers and others whose jobs necessitate long working hours. Risks You cannot sack or treat your employee unfairly if they refused to opt out.



Probation letter

What is it? A probation letter is a letter by which an employer informs an employee that their probation period has finished and tells them the outcome of the probation. The outcome may be threefold: (a) that the employee has successfully completed their probationary period and their employment will continue OR (b) the employee’s probation will be extended as the employee’s performance needs to improve OR (c) the employee’s employment is being terminated as the employee has not met the company’s performance requirements. Our employment solicitors can provided you with a suite of sample employment probation letters to use as a guide. Employers should adapt the content to suit their requirements and or contact us for further advice if required.



Flexible working request

What is it? An employee can make a “flexible working request” to their employer if they want to work part-time instead of full-time, change their start and finishing times, work compressed hours(i.e. do their standard hours over fewer days), job-share or do “flexi-time”. Flexitime is where an employee is granted permission to be flexible with their start and finish times. Why is it important? The law provides that an employee has the right to make a flexible working request if (a) the employee has worked for their employer for at least 26 weeks (b) the member of staff is legally classed as an employee and (c) the employee has not made any other flexible working request in the last 12 months. By law, if the employee has the right to make the request the employer is obliged to look at the request fairly in accordance with the Acas Code of Practice on flexible working requests and, make a decision within 3 months.



Grievance letter

What is it?

A grievance is a concern, problem or complaint raised by an employee in the workplace about their work, their manager, other staff member or the workplace. It could be about the employee’s pay and benefits, work conditions, workload, bullying or harassment. There is no legally binding process that an employer must follow when handling a grievance at work. However, it is best practice as an employer to have a grievance procedure.

Why is it important?

A grievance procedure is one of the ways to resolve a problem at work. This procedure can be set out in the employment contract, company handbook, HR intranet site or in your Human Resources manual.

Risks

If you do not have a grievance procedure you should ensure that you follow the Acas Code of Practice on Disciplinary and Grievance procedures if an employee comes to you with a grievance.

When an employee raises a workplace grievance you must take them seriously. Whether or not the grievance is valid you must investigate the grievance as it could be having a negative effect on the staff concerned and may lead to disgruntled staff and loss of valuable staff. Having an informal chat when an employee comes to you with an issue may be all that is needed. If the chat does not resolve the problem, you must investigate the problem .An employee should not be dismissed or treated unfairly for raising a genuine grievance.

An employee who is disadvantaged or dismissed for raising a grievance can raise a claim in the Employment Tribunal for unfair dismissal or automatic unfair dismissal. An employee would usually be expected to lodge a grievance before claiming constructive dismissal otherwise any damages awarded the employee at the Employment Tribunal could be reduced.

Avoid grievances in your workplace by contacting Pure Business law, your expert employment lawyers.



Managing licenses

Running an online business

Protecting your IP

Business Relationships

Writing a business plan

HR Policies

Joint Venture Agreement

What is it? This agreement is needed when two or more parties decide to engage in a business collaboration to deal with a particular project. There are two main types of joint ventures: i) A contractual joint venture is a contract between two parties who are looking to work together on a commercial project and pool their resources but do not want to create a separate legal entity such as a joint venture company or an LLP.(eg two businesses collaborating to bid for a contract or carry out research and development) . The collaboration will be generally be short term or for a defined period and will be of restricted scope with a well-defined purpose. ii)A corporate joint venture is a contract between two parties looking to work together on a commercial project where they will both set up a separate company (“a joint venture company”) separate from their current operations, own shares in it, have representatives from each of the companies sitting on its board and or want their company to have limited liability for the debts and obligations of the joint venture. This type of joint venture is usually suitable if you will be collaboration on a longer term project and or your collaboration will be more risky and complex and therefore justifies the time and effort of setting up a separate company.



Manufacturing Agreement

What is it? This agreement is needed if you want to employ the services of another company an individual to manufacture goods/products for you for your business. The agreement should cover a number of key areas including manufacture of the goods, materials, specification, quality control, packaging, storage, confidentiality, data protection, insurance, pricing, payment, delivery, title and risk, intellectual property, disputes, force majeure, service of notices, liability and indemnity clauses.



Memorandum of Understanding

What is it? An MOU is a pre-contract, non-binding document setting out the key terms agreed by parties who intend to enter into a binding contract. It is also known as Heads of Terms, a Letter of Intent or a Term Sheet. It is a useful tool when two or more parties intend to enter into a future contract and want to identify, describe and agree, without it being contractually binding, the terms to be further negotiated and then recorded in a contractually binding contract. There will occasionally be statements in a MOU which are exceptions to the general approach that a MOU is not binding : this will occur if the parties put in statements which the MOU expressly states are to be of legally binding effect until a definitive contract is signed. If that is the case those statements will generally be binding. Why is it important? An MOU is useful to set out the progress made during negotiations, reduce the potential for misunderstandings, indicate the major issues which still need to be resolved and make it clear what the parties intend when they enter into the contract. Risks The disadvantage of a MOU is that it can take up a considerable amount of time and may distract the parties from working on negotiating a full and detailed binding contract. There have been occasions when the parties to a proposed commercial arrangement never actually agree or sign a definite contract and have gone on to implement their deal based only on the MOU. This creates a very uncertain legal position which may lead to disputes and legal problems.



Agency Agreement

What is it? The term “agent” is often used as shorthand in a business or legal context to mean a person authorised to act for or on behalf of another who is sometimes called the “principal” As a business you need to be able to distinguish whether or not a particular arrangement amounts to a commercial agency rather than another kind of agency or relationship. This is vital if you are to understand the various legal obligations, duties and liabilities that you owe your contractors/ agents and vice versa. There are different types of individuals and companies which describe themselves as “agents”. These include for instance – commercial agents, sales agents. Employment agents, escrow agents etc. Why is it important? A commercial agent is a kind of sales agent whose relationship with their principal is largely governed by the Commercial Agents (Council Directive) Regulations 1993 whereas the relationship between any other type of sales and their principal is largely governed by the common law and not by the Regulations. A “commercial agent” is defined by the Regulations as a “…self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of their principal or to negotiate and conclude such transactions on behalf of and in the name of that principal”. Risks All commercial agency arrangements must comply with the Commercial Agents Regulations 1993. In accordance with the European Withdrawal Act 2018( ad subject to the terms of any final Brexit deal) the Regulations will remain in force post-Brexit.In contrast a sales agent is a freelance self-employed individual or contractor who may or may not work for numerous clients. You need an Agency Agreement if you want to appoint a third party to act on your behalf, marketing and selling your products and services – generally in exchange for commission on any sales. An agency agreement sets out the terms and conditions of the relationship, the commission or fees the notice period and any exclusivity rights. Other ways in which a business can expand without considerable outlay are via a distributorship and a franchise. In contrast to a distributorship, an agent earns commission on sales but does not pay for the goods, own the goods or set the sale price charged to the customer.



Referral Agreement

What is it? A referral agreement is used where, in order to obtain more customers and sales and widen Business A’s customer base or sell into a new market, a supplier of goods or services (Business A) wishes to engage another person or business (Individual B or Business B) to effect an introduction/referral of new customers to Business A in return for which the agent receives a fee for the introduction/referral itself or for the introduction/referral where it results in a sale within a stated period after the introduction/referral. It is also known as an Introduction agreement. Examples of referrers/introducers are agents who introduce a seller of a business to a potential buyer or who introduce a potential investor to a business. Why is it important? If a business colleague is referring work to you or you are the referrer you should get a referral agreement that sets out the terms of your agreement. This will help avoid problems. A referral agreement can also be used where an e-commerce website wishes to increase its sales by allowing other websites to refer customers to them in return for a commission on sales obtained through such referrals. The fees can be either a fixed fee or percentage basis with payment when the referral is made or upon the first transaction or both. The fees and payment clause can be drafted so that if the refer fails to introduce any new business they will not get a fee.There are specific referral agreements for the introduction of clients for financial services eg investment advice and insurance products.



Licensing Agreement

What is it? There are numerous types of licensing agreements eg IP licensing agreement eg a trademark licence agreement, a licence to occupy property, a software licence agreement etc.A software licence agreement is an agreement between a software licensor (generally a software developer and/or owner) and licensee who will be using the licensed software in the course of a business or personally. Why is it important? We always recommend that our clients get a licensing agreement if for example they want to give a person or another business the right to use their technology, software or any other type of intellectual property. A software licence will set out what the user may or may not do with a piece of software thereby helping developers ensure that they maximise returns on their investments, restrict others from free use of their creative and inventive work and product software that remains stable across a broad range of computer systems.



End User Licence Agreement

What is it? This is a licence agreement between a software provider and a user where software is distributed en-masse through retailers or electronically eg Microsoft and people who use its software. The different types of end-user licences include a Web Wrap software licence (designed for use with software that is distributed electronically via download ) Click Wrap Licence (designed for use with software that can be distributed electronically via download or on physical media such as a CD or DVD-Rom, Shrink Wrap Licence (designed for use in or on the packaging of software that is distributed on physical media such as a CD or DVD-Rom).



Service Level Agreement

What is it? Businesses often seek to obtain services from other businesses for various reasons. In some cases, a simple service agreement is all that is needed especially where the services in question are to be provided over a short term.However, in some cases a long-term relationship and the need for service consistency is essential. In such cases a business owner may prefer to enter into a Service Level Agreement with the service provider. Why is it important? Commonly used in the IT & Technology industries, but also applicable in other areas of business especially where large-scale or complex services are involved Service Level Agreements set out the services to be provided under a contract and also sets out the levels of performance to which those services must be provided. Detailed provisions govern the monitoring of the performance of the services and the agreement. Risks The service provider is thereby incentivised to consistently provide services in line with the agreed performance levels. If it fails to meet the agreed service levels it is subject to penalties. Service level agreements are preferable to standard service agreements as they contain much more detail, enhanced clarity and accountability over and above standard service agreements.



Partnership agreement

What is it? There are 2 main types of partnership agreements: An unlimited partnership – This is a relationship between two or more parties carrying on business together to make a profit. It is usually referred to as a “partnership” or a “general partnership” to distinguish it from other types of partnership such as a limited liability partnership. A partnership can arise by law even if there is no agreement in writing and even if the parties did not intend to create a partnership. An unlimited partnership is not a separate legal entity unlike a company or a limited liability partnership. Therefore, its partners have unlimited liability for the partnership’s debts. A limited liability partnership – Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement setting out how the LLP will be run.



LLP agreement

What is it? This agreement applies when you have a limited liability partnership. Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. Why is it important? The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement (LLP Agreement) setting out how the LLP will be run.



Distribution agreement

What is it? A distributor buys goods from a supplier to sell on to customers. They can earn a profit margin based on the “mark-up” they add to the original sale price. A Distributorship agreement is an agreement whereby the manufacturer appoints the distributor on a “sole” or “non-exclusive” basis) to resell the manufacturer’s products in a particular territory/ies. In this case, the ownership of the goods is transferred to the distributor prior to the marketing and sale of the goods which means that the distributor may hold stocks of goods which they pay for and own – they therefore bear the risk as to whether they can resell the goods. There are different types of distribution agreements eg exclusive, sole and selective distribution agreements. Business relationships can sour if based on verbal agreements. Protect your rights by ensuring you have a written distribution agreement.



Model release letter

What is it? A signed Model Release Form protects your profit margin and your copyright. Whether you work in a marketing business graphic design or are a commercial vlogger or blogger you need to ensure that any photographs that you use in your business has a properly signed release form. Whilst you do not generally need written permission to take photos, if you take photos and wish to publish the photos on the internet or in any other way or if you are starting a photography business you can protect yourself from any liability or legal proceedings by using a Model Release Form or Letter. A Model Release Form is the contract between the photographer or User and the “model” (i.e. the subject or owner of the image or photograph). Designed to protect both parties it specifies the ways in which the images or models can or cannot be used (eg for advertising, to make prints, post on social media etc), the media formats, the use or not of the model’s name, the model’s rights (or not) to inspect the end product before publication and the expiry (or not) of the release. Why is it important? A Model Release Form is not about obtaining permission to take photographs – it is about obtaining signed consent to publish the photographs for commercial purposes. Whilst it is generally okay to take pictures of a person or people in a public place without written permission if you want to use that photo for specific commercial purposes eg to promote a product on the internet or elsewhere it is best to be safe and get a signed release form from the “model” or owner of the “model”. Risks But do get legal advice before you use a release form template as it may need adapting to fit your particular needs.And remember! If you want to use images for a purpose not originally agreed, you MUST get further signed consent.



Sales agency agreement

What is it? If you are a business selling products you may decide to employ the services of a sales agent. A sales agent is a freelance self-employed business or contractor who might or might not work for several clients. The term “sales agent” includes a “commercial agent” but it is usual to distinguish the two forms of agency by referring to someone as a sales agent only if they are not a “commercial agent” as the legal position of a “commercial agent” differs substantially from other forms of “sales agency”. The business that owns the products will be called the “Principal” and the sales agent will be called the “Agent”. The sales agent is paid commission only and so is motivated to make as many sales as possible to maximise their income.Central to the relationship between a business and their sales agent will be the “Agency Agreement”. The Sales Agency agreement will set out the product the agent will be selling, where the agent will be selling those products, how the sales are to take place, commission payable on all sales and the key rights and responsibilities of the parties. Why is it important? The use of sales agents as opposed to an employed sales team has a number of benefits for the business (i.e. the “Principal”) since commission is only payable on achieved sales, there are no fixed employment costs, and the agent will often already have a network of contacts ie established customer base, will know the market in their area and will have credibility with their customer base.



Sub-contracting agreement

What is it? Many business contracts allow one or both parties to sub-contract all or part of their obligations under a contract. This can be done via a letter termed a “Notice of Intention to Sub-contract” from the main contractor to the other party to the main contract or via a formal “Sub-contracting” agreement. Where a “Notice of intention to sub-contract” letter is used, the main contractor (ie sender of the letter) would inform the other party to the contract (ie the recipient of the letter) that the main contractor intends to subcontract certain of their obligations under a contract and will provide details of the subcontractor(s) to whom the obligations will be sub-contracted, a detailed description of the obligations to be sub-contracted with cross-references to the relevant parts of the Contract agreement between the main contractor and the other party to the contract agreement. The recipient will also be reminded that they are not a party to the sub-contract and that the main contractor will remain their primary contact person and will also remain liable for any acts of omissions of the subcontractors. As an option, the main contractor may also decide to enter into a formal “Sub-contracting” agreement with the sub-contractor and send a copy of this to



Franchise Agreement

What is it? Franchising your business lets you licence your business model to companies or individual in particular geographical areas and allows you to increase your profits while maintaining a significant degree of control over your brand. A Franchise agreement is an agreement under which the owner of a business grants a licence or licences to others (the “franchisees”) to operate that business in a particular area within the UK or internationally either on a “sole” or “non-exclusive” basis, for a fee therefore spreading their corporate identity and products or services without the expense of setting up new establishments. All franchisees will use a common identity including the name, trademarks, goodwill, other intellectual property and or products of the franchisor. The franchisor will also provide a “Quality Manual” which in effect is a rule book setting out all the relevant detail needed for the successful day-to-day running of the franchised business eg minimum standards and insurance requirements. The agreement will usually include a confidentiality clause protecting all commercially sensitive information and trade secrets from unauthorised disclosure thereby protecting the interests of the franchisor. Why is it important? Franchising has benefits for the franchisor and the franchisee. The franchisor can grow its business without having to open, staff and manage new premises or branches itself whilst the franchisee can manage his/her own business which has been already tested by the franchisor and has access to the franchisor’s experience and expertise. McDonalds and Kentucky Fried Chicken (KFC) operate their own restaurants and food outlets but also grant franchises to others to operate McDonalds and KFC businesses using their logos with McDonalds and Kentucky Fried Chicken exercising tight quality control over the restaurants, their location, food, health and safety etc.



Managing licenses

Running an online business

Protecting your IP

Business Relationships

Writing a business plan

Protecting your IP

Trademark (UK, EU, US, China)

What is it? One of the best ways of protecting your business name, brand and logo from being copied is to register a trademark. A trademark is a distinctive sign eg name, brand, logo or tagline (or a combination of these) used by a business to distinguish its goods and or services from those sold by another business and to identify its business as the source of those goods and services. In the UK, trademarks are granted by the UK Intellectual Property Office (UK IPO) Registering a trademark increases the protection it receives and stops others from using it. You may be able to register a trademark over:

  • words (eg the trademark “Nandos”)
  • pictures and words (eg the Pure Business Law trademark).
  • slogans (eg the Lidl strap line “Big on quality, Lidl on price”)
  • colours (eg the Cadbury Dairy Milk purple as owned by Kraft ).
  • sounds (eg the Match of the Day theme song played when their logo appears at the beginning of football matches) and
  • Logos (eg the Mac OS logo);
  • 3D shapes (eg the Pepsi cola bottle shape)
Why is it important? Registering a name or a logo gives you the following three benefits: Allows you to object if someone else applies to register ay name or logo that is similar to your trademark for the same of similar goods or services. This protection does not cover an application to use the same name or branding for a different type of business. For instance if you register “Fast-Sports” for a trade mark for selling sports cars, no one could register “Fast-Spots” for anything to do with selling cars but they may be able to register it as a trade mark for a dry-cleaning business because that has nothing to do with cars. If another business tries to use the same or similar branding on similar goods or services thereby infringing your trademark you can take legal proceedings to stop them. Your business’s goodwill and reputation have commercial value so registering a trademark is an easy way to protect your hard work and creativity. Registering a trademark gives you the exclusive right to use it for 10 years, after which you must make an application to renew it to the Intellectual Property Office (IPO). Their website is at www.ipo.gov.uk. You can register your trademarks in the UK, the EU and or internationally. All registrations last for 10years and are renewable indefinitely in further 10-year periods. The most suitable registration for your brand will depend on where you do business eg UK, EU or internationally. Risks If you do not register your name, brand or logo as a trademark you will not be able to easily stop other people using your trademark and you may end up allowing other businesses to profit from your hard work.



Patent (Worldwide)

What is it? Protect your invention through a patent. A patent gives you an exclusive right over a novel invention that you have created. It gives you the exclusive right to use and reproduce your invention and stop people copying your invention without your permission. For instance, only Apple can make and sell Apple phones. In the UK, patents are granted by the UK Intellectual Property Office (UK IPO) To have a patent over something you have created, you must register it at the IPO. Patents generally last for up to twenty years. You can only patent a novel invention and cannot patent something that is already in the public domain. This means that your invention must be new (i.e. you cannot patent something which already exists eg a literary work, method of medical treatment, a diagnosis, scientific theory or a discovery) . You also cannot patent something which is already the subject of a patent application pre-dating your application. This means that you must carry out extensive market research examining trade journals and academic papers relevant to your industry market and searching for patents and patent applications on the patent registers worldwide. Obtaining a patent is expensive and time consuming. You should enlist the help of a professional eg lawyer or patent agent before starting an application for a patent. Why is it important?
Should I register my invention as a patent? Yes, you should if you believe that you have created a novel product or process which is so important to your business that you wish to pay a patent application fee to prevent others from using it. Risks Registering your invention as a patent ensures that:

  1. You can prevent others using your product or process if they intend to use it for commercial purposes.
  2. You can profit from your patent by only permitting certain people to use it for commercial purposes and only on condition that they pay you or give you a percentage of the profits they make from using your patent.
Risks If you do not register your invention as a patent, you will not be able to easily stop other people copying your ideas and you may end up allowing other businesses to profit from your hard work. You can use free online databases to search for patents eg Ipsum the UK IPO’s search facility, the Patents Journal (for UK applications that have been filed but not yet published), Espacenet – the European Patents Office’s (EPO’s) free database for worldwide patents including UK patents and Patentscope – the World Intellectual Property Organisation’s (WIPO’s ) free database for worldwide patents including UK patents. Note that these databases may not be up to date. As an alternative you may prefer to use professional search services such as:
  1. The PATLIB (patent library) centre
  2. A Patent attorney through the Chartered Institute of Patent Attorneys at www.cipa.org.uk



IP Assignment Agreement

What is it? An IP assignment agreement transfers rights and ownership in an IP created by one person to someone else or to a business. It can be used to transfer rights in a trademark, patent, logo, designs or any other IP. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work.



Registering Designs

What is it? Register your design to stop someone else from using it. A design right is a right that you have which can protect your original design from being copied by someone else.There are two different types of design rights – registered and unregistered design rights which can protect the look or appearance of a product from being copied. Why is it important? Design rights can exist in computer icons, logos, graphic designs, packaging and clothing. The rights do not arise by reference to the particular product but rather in the shape or look of either the whole of the product or part of that product. For instance, a registered design right in a motif used on a book will be infringed if someone else uses the same design motif on a duvet cover. In the UK, design registrations are granted by the UK Intellectual Property Office (UK IPO). Risks Even if you do not register your design, it will still be automatically protected as an unregistered design right. However this right is more limited right because it only protects you against unauthorised copying and does not prevent other people creating similar designs independently. For businesses in the UK these unregistered design rights arise automatically in the UK and the EU for some designs under both UK and EU law if the relevant criteria are met. In the UK, unregistered design rights arise as soon as the relevant designs are recorded in some way eg in a drawing and in the UK as soon as they are made available to the public. However, the protection granted differs slightly in each jurisdiction. For instance in the UK unregistered design rights will automatically protect either the shape or configuration of the whole or part of an article for up to 15 years, whereas in the EU unregistered design rights will automatically protect not only the appearance of the whole or part of any industrial or handicraft product resulting from its features but also its lines, shape, texture, contours and materials but only for up to 3 years. You should therefor keep a watching brief and consider whether such a right has arisen as soon as you believe that either you or your employees (in the course of their employment) have created an original design. Brexit The UK and the EU have agreed that there will be an implementation period (ie transition period) from the date the UK left the EU i.e. 31 January 2020 until 31 December 2020 or a later date if the transition period is extended. During this period there will be no changes to unregistered design rights. UK unregistered design rights UK unregistered design rights will continue after the transition period and provide up to 15 years of protection. However, after the transition period the UK Government has advised that only UK residents or businesses incorporated in the UK will be eligible for UK registered designs. EU unregistered design rights From the end of the transition period unregistered design rights in the EU (ie unregistered Community designs) will no longer be valid in the IK. The government has advised that it will immediately replace the unregistered Community design rights with UK unregistered design rights ( to be known as UK continuing unregistered design rights) and which will offer protection in the EU and UK for the rest of the three year terms previously attached to the unregistered Community design right. This means you will continue to be protected in the EU and UK for unregistered Community designs that existed before the end of the transition period. If you are concerned about how to protect your unregistered design rights in the UK and EU after the transition period please contact our IP lawyers for further advice on 01234 938089.



Non-Disclosure Agreement (NDA)/Letter of confidentiality

What is it? This agreement protects confidential information belonging to your business including IP and other information which you do not want to be made public. Why is it important? It is important to have an NDA in place before sharing any confidential or sensitive information in business meetings with people with whom you intend to do business eg investors, prospective co-founders, suppliers, consultants and the like. A letter of confidentiality is similar to a non-disclosure agreement. The party disclosing confidential information imposes restrictions as to the use of this confidential information to the party receiving it. Risks If you do not have the required safeguards in place to protect your intellectual property during business meetings or negotiations you may have your designs, inventions or work stolen or copied by the person with whom you are negotiating. This could be disastrous for your business.



one-way confidentiality agreement

What is it? A one-way Confidentiality agreement is similar to a non-disclosure agreement but imposes restrictions as to the use of this confidential information only on one party.



Assignment of intellectual property

What is it? An IP assignment agreement transfers rights and ownership in an IP created by one-person eg trademark, patent, logo, designs or any other IP to someone else or to a business. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work. If you assign IP rights to another business, you are transferring ownership of the IP. It is more common to licence intellectual property rights than to assign them in business. Licensing allows a third party to have rights over the IP and do certain acts with the IP that they would not otherwise have been able to do but you keep ownership of the IP. You can limit the licence to a certain area eg the UK, Middle East, Africa etc or to a certain period of time eg 1 year, 2 years etc. Risks If for example you assign your IP to a business and it fails, you would have lost your IP. If on the other hand you licence your IP to another business, you are in ultimate control and can stipulate how the IP should be used and when it has to be returned. You can also stipulate that the IP be returned to you if the business goes into liquidation or on the happening of certain events.



Copyright

What is it? Copyright is the exclusive right to use and reproduce in public any material you have created if it falls into one of the following categories: i) Written work such as books, plays film scripts, web content, articles, essays, professional opinions, tables, compilations and databases; ii)Artistic works such as paintings, drawings, photos, maps, charts, plan, diagrams etc; iii)sound recordings; iv)Films, music and broadcasts; or v) computer programs. Why is it important? Copyright arises automatically when you create the work so there is no need to register copyright to own a work that you have created. You should be wary of any person that asks you to pay them to register your copyright in a work that you have created as it will be a scam. Businesses as well as individuals can own copyright. Copyright usually lasts for 70 years. You can buy someone’s copyright via a document called a Deed of assignment or give them a licence to use your copyright. As a general rule if an employee creates a work in the course of their employment their employer (ie the business ) will own the work. However, if the work in question is not part of the agreed duties of the employee the employee will own the work. To ensure that copyright work created by employees is owned by the business you should include appropriate intellectual property clauses in your employment contracts. Risks If you commission a piece of work from a freelancer the copyright in the work will belong to the freelancer unless the parties have agreed otherwise. It is important to ensure that the position on ownership of the copyright in writing before work starts to ensure that the business owns the copyright in the work produced by the freelancer.



Business Relationships

Joint Venture Agreement

What is it? This agreement is needed when two or more parties decide to engage in a business collaboration to deal with a particular project. There are two main types of joint ventures: i) A contractual joint venture is a contract between two parties who are looking to work together on a commercial project and pool their resources but do not want to create a separate legal entity such as a joint venture company or an LLP.(eg two businesses collaborating to bid for a contract or carry out research and development) . The collaboration will be generally be short term or for a defined period and will be of restricted scope with a well-defined purpose. ii)A corporate joint venture is a contract between two parties looking to work together on a commercial project where they will both set up a separate company (“a joint venture company”) separate from their current operations, own shares in it, have representatives from each of the companies sitting on its board and or want their company to have limited liability for the debts and obligations of the joint venture. This type of joint venture is usually suitable if you will be collaboration on a longer term project and or your collaboration will be more risky and complex and therefore justifies the time and effort of setting up a separate company.



Manufacturing Agreement

What is it? This agreement is needed if you want to employ the services of another company an individual to manufacture goods/products for you for your business. The agreement should cover a number of key areas including manufacture of the goods, materials, specification, quality control, packaging, storage, confidentiality, data protection, insurance, pricing, payment, delivery, title and risk, intellectual property, disputes, force majeure, service of notices, liability and indemnity clauses.



Memorandum of Understanding

What is it? An MOU is a pre-contract, non-binding document setting out the key terms agreed by parties who intend to enter into a binding contract. It is also known as Heads of Terms, a Letter of Intent or a Term Sheet. It is a useful tool when two or more parties intend to enter into a future contract and want to identify, describe and agree, without it being contractually binding, the terms to be further negotiated and then recorded in a contractually binding contract. There will occasionally be statements in a MOU which are exceptions to the general approach that a MOU is not binding : this will occur if the parties put in statements which the MOU expressly states are to be of legally binding effect until a definitive contract is signed. If that is the case those statements will generally be binding. Why is it important? An MOU is useful to set out the progress made during negotiations, reduce the potential for misunderstandings, indicate the major issues which still need to be resolved and make it clear what the parties intend when they enter into the contract. Risks The disadvantage of a MOU is that it can take up a considerable amount of time and may distract the parties from working on negotiating a full and detailed binding contract. There have been occasions when the parties to a proposed commercial arrangement never actually agree or sign a definite contract and have gone on to implement their deal based only on the MOU. This creates a very uncertain legal position which may lead to disputes and legal problems.



Agency Agreement

What is it? The term “agent” is often used as shorthand in a business or legal context to mean a person authorised to act for or on behalf of another who is sometimes called the “principal” As a business you need to be able to distinguish whether or not a particular arrangement amounts to a commercial agency rather than another kind of agency or relationship. This is vital if you are to understand the various legal obligations, duties and liabilities that you owe your contractors/ agents and vice versa. There are different types of individuals and companies which describe themselves as “agents”. These include for instance – commercial agents, sales agents. Employment agents, escrow agents etc. Why is it important? A commercial agent is a kind of sales agent whose relationship with their principal is largely governed by the Commercial Agents (Council Directive) Regulations 1993 whereas the relationship between any other type of sales and their principal is largely governed by the common law and not by the Regulations. A “commercial agent” is defined by the Regulations as a “…self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of their principal or to negotiate and conclude such transactions on behalf of and in the name of that principal”. Risks All commercial agency arrangements must comply with the Commercial Agents Regulations 1993. In accordance with the European Withdrawal Act 2018( ad subject to the terms of any final Brexit deal) the Regulations will remain in force post-Brexit.In contrast a sales agent is a freelance self-employed individual or contractor who may or may not work for numerous clients. You need an Agency Agreement if you want to appoint a third party to act on your behalf, marketing and selling your products and services – generally in exchange for commission on any sales. An agency agreement sets out the terms and conditions of the relationship, the commission or fees the notice period and any exclusivity rights. Other ways in which a business can expand without considerable outlay are via a distributorship and a franchise. In contrast to a distributorship, an agent earns commission on sales but does not pay for the goods, own the goods or set the sale price charged to the customer.



Referral Agreement

What is it? A referral agreement is used where, in order to obtain more customers and sales and widen Business A’s customer base or sell into a new market, a supplier of goods or services (Business A) wishes to engage another person or business (Individual B or Business B) to effect an introduction/referral of new customers to Business A in return for which the agent receives a fee for the introduction/referral itself or for the introduction/referral where it results in a sale within a stated period after the introduction/referral. It is also known as an Introduction agreement. Examples of referrers/introducers are agents who introduce a seller of a business to a potential buyer or who introduce a potential investor to a business. Why is it important? If a business colleague is referring work to you or you are the referrer you should get a referral agreement that sets out the terms of your agreement. This will help avoid problems. A referral agreement can also be used where an e-commerce website wishes to increase its sales by allowing other websites to refer customers to them in return for a commission on sales obtained through such referrals. The fees can be either a fixed fee or percentage basis with payment when the referral is made or upon the first transaction or both. The fees and payment clause can be drafted so that if the refer fails to introduce any new business they will not get a fee.There are specific referral agreements for the introduction of clients for financial services eg investment advice and insurance products.



Licensing Agreement

What is it? There are numerous types of licensing agreements eg IP licensing agreement eg a trademark licence agreement, a licence to occupy property, a software licence agreement etc.A software licence agreement is an agreement between a software licensor (generally a software developer and/or owner) and licensee who will be using the licensed software in the course of a business or personally. Why is it important? We always recommend that our clients get a licensing agreement if for example they want to give a person or another business the right to use their technology, software or any other type of intellectual property. A software licence will set out what the user may or may not do with a piece of software thereby helping developers ensure that they maximise returns on their investments, restrict others from free use of their creative and inventive work and product software that remains stable across a broad range of computer systems.



End User Licence Agreement

What is it? This is a licence agreement between a software provider and a user where software is distributed en-masse through retailers or electronically eg Microsoft and people who use its software. The different types of end-user licences include a Web Wrap software licence (designed for use with software that is distributed electronically via download ) Click Wrap Licence (designed for use with software that can be distributed electronically via download or on physical media such as a CD or DVD-Rom, Shrink Wrap Licence (designed for use in or on the packaging of software that is distributed on physical media such as a CD or DVD-Rom).



Service Level Agreement

What is it? Businesses often seek to obtain services from other businesses for various reasons. In some cases, a simple service agreement is all that is needed especially where the services in question are to be provided over a short term.However, in some cases a long-term relationship and the need for service consistency is essential. In such cases a business owner may prefer to enter into a Service Level Agreement with the service provider. Why is it important? Commonly used in the IT & Technology industries, but also applicable in other areas of business especially where large-scale or complex services are involved Service Level Agreements set out the services to be provided under a contract and also sets out the levels of performance to which those services must be provided. Detailed provisions govern the monitoring of the performance of the services and the agreement. Risks The service provider is thereby incentivised to consistently provide services in line with the agreed performance levels. If it fails to meet the agreed service levels it is subject to penalties. Service level agreements are preferable to standard service agreements as they contain much more detail, enhanced clarity and accountability over and above standard service agreements.



Partnership agreement

What is it? There are 2 main types of partnership agreements: An unlimited partnership – This is a relationship between two or more parties carrying on business together to make a profit. It is usually referred to as a “partnership” or a “general partnership” to distinguish it from other types of partnership such as a limited liability partnership. A partnership can arise by law even if there is no agreement in writing and even if the parties did not intend to create a partnership. An unlimited partnership is not a separate legal entity unlike a company or a limited liability partnership. Therefore, its partners have unlimited liability for the partnership’s debts. A limited liability partnership – Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement setting out how the LLP will be run.



LLP agreement

What is it? This agreement applies when you have a limited liability partnership. Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. Why is it important? The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement (LLP Agreement) setting out how the LLP will be run.



Distribution agreement

What is it? A distributor buys goods from a supplier to sell on to customers. They can earn a profit margin based on the “mark-up” they add to the original sale price. A Distributorship agreement is an agreement whereby the manufacturer appoints the distributor on a “sole” or “non-exclusive” basis) to resell the manufacturer’s products in a particular territory/ies. In this case, the ownership of the goods is transferred to the distributor prior to the marketing and sale of the goods which means that the distributor may hold stocks of goods which they pay for and own – they therefore bear the risk as to whether they can resell the goods. There are different types of distribution agreements eg exclusive, sole and selective distribution agreements. Business relationships can sour if based on verbal agreements. Protect your rights by ensuring you have a written distribution agreement.



Model release letter

What is it? A signed Model Release Form protects your profit margin and your copyright. Whether you work in a marketing business graphic design or are a commercial vlogger or blogger you need to ensure that any photographs that you use in your business has a properly signed release form. Whilst you do not generally need written permission to take photos, if you take photos and wish to publish the photos on the internet or in any other way or if you are starting a photography business you can protect yourself from any liability or legal proceedings by using a Model Release Form or Letter. A Model Release Form is the contract between the photographer or User and the “model” (i.e. the subject or owner of the image or photograph). Designed to protect both parties it specifies the ways in which the images or models can or cannot be used (eg for advertising, to make prints, post on social media etc), the media formats, the use or not of the model’s name, the model’s rights (or not) to inspect the end product before publication and the expiry (or not) of the release. Why is it important? A Model Release Form is not about obtaining permission to take photographs – it is about obtaining signed consent to publish the photographs for commercial purposes. Whilst it is generally okay to take pictures of a person or people in a public place without written permission if you want to use that photo for specific commercial purposes eg to promote a product on the internet or elsewhere it is best to be safe and get a signed release form from the “model” or owner of the “model”. Risks But do get legal advice before you use a release form template as it may need adapting to fit your particular needs.And remember! If you want to use images for a purpose not originally agreed, you MUST get further signed consent.



Sales agency agreement

What is it? If you are a business selling products you may decide to employ the services of a sales agent. A sales agent is a freelance self-employed business or contractor who might or might not work for several clients. The term “sales agent” includes a “commercial agent” but it is usual to distinguish the two forms of agency by referring to someone as a sales agent only if they are not a “commercial agent” as the legal position of a “commercial agent” differs substantially from other forms of “sales agency”. The business that owns the products will be called the “Principal” and the sales agent will be called the “Agent”. The sales agent is paid commission only and so is motivated to make as many sales as possible to maximise their income.Central to the relationship between a business and their sales agent will be the “Agency Agreement”. The Sales Agency agreement will set out the product the agent will be selling, where the agent will be selling those products, how the sales are to take place, commission payable on all sales and the key rights and responsibilities of the parties. Why is it important? The use of sales agents as opposed to an employed sales team has a number of benefits for the business (i.e. the “Principal”) since commission is only payable on achieved sales, there are no fixed employment costs, and the agent will often already have a network of contacts ie established customer base, will know the market in their area and will have credibility with their customer base.



Sub-contracting agreement

What is it? Many business contracts allow one or both parties to sub-contract all or part of their obligations under a contract. This can be done via a letter termed a “Notice of Intention to Sub-contract” from the main contractor to the other party to the main contract or via a formal “Sub-contracting” agreement. Where a “Notice of intention to sub-contract” letter is used, the main contractor (ie sender of the letter) would inform the other party to the contract (ie the recipient of the letter) that the main contractor intends to subcontract certain of their obligations under a contract and will provide details of the subcontractor(s) to whom the obligations will be sub-contracted, a detailed description of the obligations to be sub-contracted with cross-references to the relevant parts of the Contract agreement between the main contractor and the other party to the contract agreement. The recipient will also be reminded that they are not a party to the sub-contract and that the main contractor will remain their primary contact person and will also remain liable for any acts of omissions of the subcontractors. As an option, the main contractor may also decide to enter into a formal “Sub-contracting” agreement with the sub-contractor and send a copy of this to



Franchise Agreement

What is it? Franchising your business lets you licence your business model to companies or individual in particular geographical areas and allows you to increase your profits while maintaining a significant degree of control over your brand. A Franchise agreement is an agreement under which the owner of a business grants a licence or licences to others (the “franchisees”) to operate that business in a particular area within the UK or internationally either on a “sole” or “non-exclusive” basis, for a fee therefore spreading their corporate identity and products or services without the expense of setting up new establishments. All franchisees will use a common identity including the name, trademarks, goodwill, other intellectual property and or products of the franchisor. The franchisor will also provide a “Quality Manual” which in effect is a rule book setting out all the relevant detail needed for the successful day-to-day running of the franchised business eg minimum standards and insurance requirements. The agreement will usually include a confidentiality clause protecting all commercially sensitive information and trade secrets from unauthorised disclosure thereby protecting the interests of the franchisor. Why is it important? Franchising has benefits for the franchisor and the franchisee. The franchisor can grow its business without having to open, staff and manage new premises or branches itself whilst the franchisee can manage his/her own business which has been already tested by the franchisor and has access to the franchisor’s experience and expertise. McDonalds and Kentucky Fried Chicken (KFC) operate their own restaurants and food outlets but also grant franchises to others to operate McDonalds and KFC businesses using their logos with McDonalds and Kentucky Fried Chicken exercising tight quality control over the restaurants, their location, food, health and safety etc.



Managing licenses

Running an online business

Protecting your IP

Business Relationships

Writing a business plan

Running an online business

Trademark (UK, EU, US, China)

What is it? One of the best ways of protecting your business name, brand and logo from being copied is to register a trademark. A trademark is a distinctive sign eg name, brand, logo or tagline (or a combination of these) used by a business to distinguish its goods and or services from those sold by another business and to identify its business as the source of those goods and services. In the UK, trademarks are granted by the UK Intellectual Property Office (UK IPO) Registering a trademark increases the protection it receives and stops others from using it. You may be able to register a trademark over:

  • words (eg the trademark “Nandos”)
  • pictures and words (eg the Pure Business Law trademark).
  • slogans (eg the Lidl strap line “Big on quality, Lidl on price”)
  • colours (eg the Cadbury Dairy Milk purple as owned by Kraft ).
  • sounds (eg the Match of the Day theme song played when their logo appears at the beginning of football matches) and
  • Logos (eg the Mac OS logo);
  • 3D shapes (eg the Pepsi cola bottle shape)
Why is it important? Registering a name or a logo gives you the following three benefits: Allows you to object if someone else applies to register ay name or logo that is similar to your trademark for the same of similar goods or services. This protection does not cover an application to use the same name or branding for a different type of business. For instance if you register “Fast-Sports” for a trade mark for selling sports cars, no one could register “Fast-Spots” for anything to do with selling cars but they may be able to register it as a trade mark for a dry-cleaning business because that has nothing to do with cars. If another business tries to use the same or similar branding on similar goods or services thereby infringing your trademark you can take legal proceedings to stop them. Your business’s goodwill and reputation have commercial value so registering a trademark is an easy way to protect your hard work and creativity. Registering a trademark gives you the exclusive right to use it for 10 years, after which you must make an application to renew it to the Intellectual Property Office (IPO). Their website is at www.ipo.gov.uk. You can register your trademarks in the UK, the EU and or internationally. All registrations last for 10years and are renewable indefinitely in further 10-year periods. The most suitable registration for your brand will depend on where you do business eg UK, EU or internationally. Risks If you do not register your name, brand or logo as a trademark you will not be able to easily stop other people using your trademark and you may end up allowing other businesses to profit from your hard work.



Patent (Worldwide)

What is it? Protect your invention through a patent. A patent gives you an exclusive right over a novel invention that you have created. It gives you the exclusive right to use and reproduce your invention and stop people copying your invention without your permission. For instance, only Apple can make and sell Apple phones. In the UK, patents are granted by the UK Intellectual Property Office (UK IPO) To have a patent over something you have created, you must register it at the IPO. Patents generally last for up to twenty years. You can only patent a novel invention and cannot patent something that is already in the public domain. This means that your invention must be new (i.e. you cannot patent something which already exists eg a literary work, method of medical treatment, a diagnosis, scientific theory or a discovery) . You also cannot patent something which is already the subject of a patent application pre-dating your application. This means that you must carry out extensive market research examining trade journals and academic papers relevant to your industry market and searching for patents and patent applications on the patent registers worldwide. Obtaining a patent is expensive and time consuming. You should enlist the help of a professional eg lawyer or patent agent before starting an application for a patent. Why is it important?
Should I register my invention as a patent? Yes, you should if you believe that you have created a novel product or process which is so important to your business that you wish to pay a patent application fee to prevent others from using it. Risks Registering your invention as a patent ensures that:

  1. You can prevent others using your product or process if they intend to use it for commercial purposes.
  2. You can profit from your patent by only permitting certain people to use it for commercial purposes and only on condition that they pay you or give you a percentage of the profits they make from using your patent.
Risks If you do not register your invention as a patent, you will not be able to easily stop other people copying your ideas and you may end up allowing other businesses to profit from your hard work. You can use free online databases to search for patents eg Ipsum the UK IPO’s search facility, the Patents Journal (for UK applications that have been filed but not yet published), Espacenet – the European Patents Office’s (EPO’s) free database for worldwide patents including UK patents and Patentscope – the World Intellectual Property Organisation’s (WIPO’s ) free database for worldwide patents including UK patents. Note that these databases may not be up to date. As an alternative you may prefer to use professional search services such as:
  1. The PATLIB (patent library) centre
  2. A Patent attorney through the Chartered Institute of Patent Attorneys at www.cipa.org.uk



IP Assignment Agreement

What is it? An IP assignment agreement transfers rights and ownership in an IP created by one person to someone else or to a business. It can be used to transfer rights in a trademark, patent, logo, designs or any other IP. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work.



Registering Designs

What is it? Register your design to stop someone else from using it. A design right is a right that you have which can protect your original design from being copied by someone else.There are two different types of design rights – registered and unregistered design rights which can protect the look or appearance of a product from being copied. Why is it important? Design rights can exist in computer icons, logos, graphic designs, packaging and clothing. The rights do not arise by reference to the particular product but rather in the shape or look of either the whole of the product or part of that product. For instance, a registered design right in a motif used on a book will be infringed if someone else uses the same design motif on a duvet cover. In the UK, design registrations are granted by the UK Intellectual Property Office (UK IPO). Risks Even if you do not register your design, it will still be automatically protected as an unregistered design right. However this right is more limited right because it only protects you against unauthorised copying and does not prevent other people creating similar designs independently. For businesses in the UK these unregistered design rights arise automatically in the UK and the EU for some designs under both UK and EU law if the relevant criteria are met. In the UK, unregistered design rights arise as soon as the relevant designs are recorded in some way eg in a drawing and in the UK as soon as they are made available to the public. However, the protection granted differs slightly in each jurisdiction. For instance in the UK unregistered design rights will automatically protect either the shape or configuration of the whole or part of an article for up to 15 years, whereas in the EU unregistered design rights will automatically protect not only the appearance of the whole or part of any industrial or handicraft product resulting from its features but also its lines, shape, texture, contours and materials but only for up to 3 years. You should therefor keep a watching brief and consider whether such a right has arisen as soon as you believe that either you or your employees (in the course of their employment) have created an original design. Brexit The UK and the EU have agreed that there will be an implementation period (ie transition period) from the date the UK left the EU i.e. 31 January 2020 until 31 December 2020 or a later date if the transition period is extended. During this period there will be no changes to unregistered design rights. UK unregistered design rights UK unregistered design rights will continue after the transition period and provide up to 15 years of protection. However, after the transition period the UK Government has advised that only UK residents or businesses incorporated in the UK will be eligible for UK registered designs. EU unregistered design rights From the end of the transition period unregistered design rights in the EU (ie unregistered Community designs) will no longer be valid in the IK. The government has advised that it will immediately replace the unregistered Community design rights with UK unregistered design rights ( to be known as UK continuing unregistered design rights) and which will offer protection in the EU and UK for the rest of the three year terms previously attached to the unregistered Community design right. This means you will continue to be protected in the EU and UK for unregistered Community designs that existed before the end of the transition period. If you are concerned about how to protect your unregistered design rights in the UK and EU after the transition period please contact our IP lawyers for further advice on 01234 938089.



Non-Disclosure Agreement (NDA)/Letter of confidentiality

What is it? This agreement protects confidential information belonging to your business including IP and other information which you do not want to be made public. Why is it important? It is important to have an NDA in place before sharing any confidential or sensitive information in business meetings with people with whom you intend to do business eg investors, prospective co-founders, suppliers, consultants and the like. A letter of confidentiality is similar to a non-disclosure agreement. The party disclosing confidential information imposes restrictions as to the use of this confidential information to the party receiving it. Risks If you do not have the required safeguards in place to protect your intellectual property during business meetings or negotiations you may have your designs, inventions or work stolen or copied by the person with whom you are negotiating. This could be disastrous for your business.



one-way confidentiality agreement

What is it? A one-way Confidentiality agreement is similar to a non-disclosure agreement but imposes restrictions as to the use of this confidential information only on one party.



Assignment of intellectual property

What is it? An IP assignment agreement transfers rights and ownership in an IP created by one-person eg trademark, patent, logo, designs or any other IP to someone else or to a business. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work. If you assign IP rights to another business, you are transferring ownership of the IP. It is more common to licence intellectual property rights than to assign them in business. Licensing allows a third party to have rights over the IP and do certain acts with the IP that they would not otherwise have been able to do but you keep ownership of the IP. You can limit the licence to a certain area eg the UK, Middle East, Africa etc or to a certain period of time eg 1 year, 2 years etc. Risks If for example you assign your IP to a business and it fails, you would have lost your IP. If on the other hand you licence your IP to another business, you are in ultimate control and can stipulate how the IP should be used and when it has to be returned. You can also stipulate that the IP be returned to you if the business goes into liquidation or on the happening of certain events.



Copyright

What is it? Copyright is the exclusive right to use and reproduce in public any material you have created if it falls into one of the following categories: i) Written work such as books, plays film scripts, web content, articles, essays, professional opinions, tables, compilations and databases; ii)Artistic works such as paintings, drawings, photos, maps, charts, plan, diagrams etc; iii)sound recordings; iv)Films, music and broadcasts; or v) computer programs. Why is it important? Copyright arises automatically when you create the work so there is no need to register copyright to own a work that you have created. You should be wary of any person that asks you to pay them to register your copyright in a work that you have created as it will be a scam. Businesses as well as individuals can own copyright. Copyright usually lasts for 70 years. You can buy someone’s copyright via a document called a Deed of assignment or give them a licence to use your copyright. As a general rule if an employee creates a work in the course of their employment their employer (ie the business ) will own the work. However, if the work in question is not part of the agreed duties of the employee the employee will own the work. To ensure that copyright work created by employees is owned by the business you should include appropriate intellectual property clauses in your employment contracts. Risks If you commission a piece of work from a freelancer the copyright in the work will belong to the freelancer unless the parties have agreed otherwise. It is important to ensure that the position on ownership of the copyright in writing before work starts to ensure that the business owns the copyright in the work produced by the freelancer.



Buying & Selling Goods & Services

Joint Venture Agreement

What is it? This agreement is needed when two or more parties decide to engage in a business collaboration to deal with a particular project. There are two main types of joint ventures: i) A contractual joint venture is a contract between two parties who are looking to work together on a commercial project and pool their resources but do not want to create a separate legal entity such as a joint venture company or an LLP.(eg two businesses collaborating to bid for a contract or carry out research and development) . The collaboration will be generally be short term or for a defined period and will be of restricted scope with a well-defined purpose. ii)A corporate joint venture is a contract between two parties looking to work together on a commercial project where they will both set up a separate company (“a joint venture company”) separate from their current operations, own shares in it, have representatives from each of the companies sitting on its board and or want their company to have limited liability for the debts and obligations of the joint venture. This type of joint venture is usually suitable if you will be collaboration on a longer term project and or your collaboration will be more risky and complex and therefore justifies the time and effort of setting up a separate company.



Manufacturing Agreement

What is it? This agreement is needed if you want to employ the services of another company an individual to manufacture goods/products for you for your business. The agreement should cover a number of key areas including manufacture of the goods, materials, specification, quality control, packaging, storage, confidentiality, data protection, insurance, pricing, payment, delivery, title and risk, intellectual property, disputes, force majeure, service of notices, liability and indemnity clauses.



Memorandum of Understanding

What is it? An MOU is a pre-contract, non-binding document setting out the key terms agreed by parties who intend to enter into a binding contract. It is also known as Heads of Terms, a Letter of Intent or a Term Sheet. It is a useful tool when two or more parties intend to enter into a future contract and want to identify, describe and agree, without it being contractually binding, the terms to be further negotiated and then recorded in a contractually binding contract. There will occasionally be statements in a MOU which are exceptions to the general approach that a MOU is not binding : this will occur if the parties put in statements which the MOU expressly states are to be of legally binding effect until a definitive contract is signed. If that is the case those statements will generally be binding. Why is it important? An MOU is useful to set out the progress made during negotiations, reduce the potential for misunderstandings, indicate the major issues which still need to be resolved and make it clear what the parties intend when they enter into the contract. Risks The disadvantage of a MOU is that it can take up a considerable amount of time and may distract the parties from working on negotiating a full and detailed binding contract. There have been occasions when the parties to a proposed commercial arrangement never actually agree or sign a definite contract and have gone on to implement their deal based only on the MOU. This creates a very uncertain legal position which may lead to disputes and legal problems.



Agency Agreement

What is it? The term “agent” is often used as shorthand in a business or legal context to mean a person authorised to act for or on behalf of another who is sometimes called the “principal” As a business you need to be able to distinguish whether or not a particular arrangement amounts to a commercial agency rather than another kind of agency or relationship. This is vital if you are to understand the various legal obligations, duties and liabilities that you owe your contractors/ agents and vice versa. There are different types of individuals and companies which describe themselves as “agents”. These include for instance – commercial agents, sales agents. Employment agents, escrow agents etc. Why is it important? A commercial agent is a kind of sales agent whose relationship with their principal is largely governed by the Commercial Agents (Council Directive) Regulations 1993 whereas the relationship between any other type of sales and their principal is largely governed by the common law and not by the Regulations. A “commercial agent” is defined by the Regulations as a “…self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of their principal or to negotiate and conclude such transactions on behalf of and in the name of that principal”. Risks All commercial agency arrangements must comply with the Commercial Agents Regulations 1993. In accordance with the European Withdrawal Act 2018( ad subject to the terms of any final Brexit deal) the Regulations will remain in force post-Brexit.In contrast a sales agent is a freelance self-employed individual or contractor who may or may not work for numerous clients. You need an Agency Agreement if you want to appoint a third party to act on your behalf, marketing and selling your products and services – generally in exchange for commission on any sales. An agency agreement sets out the terms and conditions of the relationship, the commission or fees the notice period and any exclusivity rights. Other ways in which a business can expand without considerable outlay are via a distributorship and a franchise. In contrast to a distributorship, an agent earns commission on sales but does not pay for the goods, own the goods or set the sale price charged to the customer.



Referral Agreement

What is it? A referral agreement is used where, in order to obtain more customers and sales and widen Business A’s customer base or sell into a new market, a supplier of goods or services (Business A) wishes to engage another person or business (Individual B or Business B) to effect an introduction/referral of new customers to Business A in return for which the agent receives a fee for the introduction/referral itself or for the introduction/referral where it results in a sale within a stated period after the introduction/referral. It is also known as an Introduction agreement. Examples of referrers/introducers are agents who introduce a seller of a business to a potential buyer or who introduce a potential investor to a business. Why is it important? If a business colleague is referring work to you or you are the referrer you should get a referral agreement that sets out the terms of your agreement. This will help avoid problems. A referral agreement can also be used where an e-commerce website wishes to increase its sales by allowing other websites to refer customers to them in return for a commission on sales obtained through such referrals. The fees can be either a fixed fee or percentage basis with payment when the referral is made or upon the first transaction or both. The fees and payment clause can be drafted so that if the refer fails to introduce any new business they will not get a fee.There are specific referral agreements for the introduction of clients for financial services eg investment advice and insurance products.



Licensing Agreement

What is it? There are numerous types of licensing agreements eg IP licensing agreement eg a trademark licence agreement, a licence to occupy property, a software licence agreement etc.A software licence agreement is an agreement between a software licensor (generally a software developer and/or owner) and licensee who will be using the licensed software in the course of a business or personally. Why is it important? We always recommend that our clients get a licensing agreement if for example they want to give a person or another business the right to use their technology, software or any other type of intellectual property. A software licence will set out what the user may or may not do with a piece of software thereby helping developers ensure that they maximise returns on their investments, restrict others from free use of their creative and inventive work and product software that remains stable across a broad range of computer systems.



End User Licence Agreement

What is it? This is a licence agreement between a software provider and a user where software is distributed en-masse through retailers or electronically eg Microsoft and people who use its software. The different types of end-user licences include a Web Wrap software licence (designed for use with software that is distributed electronically via download ) Click Wrap Licence (designed for use with software that can be distributed electronically via download or on physical media such as a CD or DVD-Rom, Shrink Wrap Licence (designed for use in or on the packaging of software that is distributed on physical media such as a CD or DVD-Rom).



Service Level Agreement

What is it? Businesses often seek to obtain services from other businesses for various reasons. In some cases, a simple service agreement is all that is needed especially where the services in question are to be provided over a short term.However, in some cases a long-term relationship and the need for service consistency is essential. In such cases a business owner may prefer to enter into a Service Level Agreement with the service provider. Why is it important? Commonly used in the IT & Technology industries, but also applicable in other areas of business especially where large-scale or complex services are involved Service Level Agreements set out the services to be provided under a contract and also sets out the levels of performance to which those services must be provided. Detailed provisions govern the monitoring of the performance of the services and the agreement. Risks The service provider is thereby incentivised to consistently provide services in line with the agreed performance levels. If it fails to meet the agreed service levels it is subject to penalties. Service level agreements are preferable to standard service agreements as they contain much more detail, enhanced clarity and accountability over and above standard service agreements.



Partnership agreement

What is it? There are 2 main types of partnership agreements: An unlimited partnership – This is a relationship between two or more parties carrying on business together to make a profit. It is usually referred to as a “partnership” or a “general partnership” to distinguish it from other types of partnership such as a limited liability partnership. A partnership can arise by law even if there is no agreement in writing and even if the parties did not intend to create a partnership. An unlimited partnership is not a separate legal entity unlike a company or a limited liability partnership. Therefore, its partners have unlimited liability for the partnership’s debts. A limited liability partnership – Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement setting out how the LLP will be run.



LLP agreement

What is it? This agreement applies when you have a limited liability partnership. Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. Why is it important? The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement (LLP Agreement) setting out how the LLP will be run.



Distribution agreement

What is it? A distributor buys goods from a supplier to sell on to customers. They can earn a profit margin based on the “mark-up” they add to the original sale price. A Distributorship agreement is an agreement whereby the manufacturer appoints the distributor on a “sole” or “non-exclusive” basis) to resell the manufacturer’s products in a particular territory/ies. In this case, the ownership of the goods is transferred to the distributor prior to the marketing and sale of the goods which means that the distributor may hold stocks of goods which they pay for and own – they therefore bear the risk as to whether they can resell the goods. There are different types of distribution agreements eg exclusive, sole and selective distribution agreements. Business relationships can sour if based on verbal agreements. Protect your rights by ensuring you have a written distribution agreement.



Model release letter

What is it? A signed Model Release Form protects your profit margin and your copyright. Whether you work in a marketing business graphic design or are a commercial vlogger or blogger you need to ensure that any photographs that you use in your business has a properly signed release form. Whilst you do not generally need written permission to take photos, if you take photos and wish to publish the photos on the internet or in any other way or if you are starting a photography business you can protect yourself from any liability or legal proceedings by using a Model Release Form or Letter. A Model Release Form is the contract between the photographer or User and the “model” (i.e. the subject or owner of the image or photograph). Designed to protect both parties it specifies the ways in which the images or models can or cannot be used (eg for advertising, to make prints, post on social media etc), the media formats, the use or not of the model’s name, the model’s rights (or not) to inspect the end product before publication and the expiry (or not) of the release. Why is it important? A Model Release Form is not about obtaining permission to take photographs – it is about obtaining signed consent to publish the photographs for commercial purposes. Whilst it is generally okay to take pictures of a person or people in a public place without written permission if you want to use that photo for specific commercial purposes eg to promote a product on the internet or elsewhere it is best to be safe and get a signed release form from the “model” or owner of the “model”. Risks But do get legal advice before you use a release form template as it may need adapting to fit your particular needs.And remember! If you want to use images for a purpose not originally agreed, you MUST get further signed consent.



Sales agency agreement

What is it? If you are a business selling products you may decide to employ the services of a sales agent. A sales agent is a freelance self-employed business or contractor who might or might not work for several clients. The term “sales agent” includes a “commercial agent” but it is usual to distinguish the two forms of agency by referring to someone as a sales agent only if they are not a “commercial agent” as the legal position of a “commercial agent” differs substantially from other forms of “sales agency”. The business that owns the products will be called the “Principal” and the sales agent will be called the “Agent”. The sales agent is paid commission only and so is motivated to make as many sales as possible to maximise their income.Central to the relationship between a business and their sales agent will be the “Agency Agreement”. The Sales Agency agreement will set out the product the agent will be selling, where the agent will be selling those products, how the sales are to take place, commission payable on all sales and the key rights and responsibilities of the parties. Why is it important? The use of sales agents as opposed to an employed sales team has a number of benefits for the business (i.e. the “Principal”) since commission is only payable on achieved sales, there are no fixed employment costs, and the agent will often already have a network of contacts ie established customer base, will know the market in their area and will have credibility with their customer base.



Sub-contracting agreement

What is it? Many business contracts allow one or both parties to sub-contract all or part of their obligations under a contract. This can be done via a letter termed a “Notice of Intention to Sub-contract” from the main contractor to the other party to the main contract or via a formal “Sub-contracting” agreement. Where a “Notice of intention to sub-contract” letter is used, the main contractor (ie sender of the letter) would inform the other party to the contract (ie the recipient of the letter) that the main contractor intends to subcontract certain of their obligations under a contract and will provide details of the subcontractor(s) to whom the obligations will be sub-contracted, a detailed description of the obligations to be sub-contracted with cross-references to the relevant parts of the Contract agreement between the main contractor and the other party to the contract agreement. The recipient will also be reminded that they are not a party to the sub-contract and that the main contractor will remain their primary contact person and will also remain liable for any acts of omissions of the subcontractors. As an option, the main contractor may also decide to enter into a formal “Sub-contracting” agreement with the sub-contractor and send a copy of this to



Franchise Agreement

What is it? Franchising your business lets you licence your business model to companies or individual in particular geographical areas and allows you to increase your profits while maintaining a significant degree of control over your brand. A Franchise agreement is an agreement under which the owner of a business grants a licence or licences to others (the “franchisees”) to operate that business in a particular area within the UK or internationally either on a “sole” or “non-exclusive” basis, for a fee therefore spreading their corporate identity and products or services without the expense of setting up new establishments. All franchisees will use a common identity including the name, trademarks, goodwill, other intellectual property and or products of the franchisor. The franchisor will also provide a “Quality Manual” which in effect is a rule book setting out all the relevant detail needed for the successful day-to-day running of the franchised business eg minimum standards and insurance requirements. The agreement will usually include a confidentiality clause protecting all commercially sensitive information and trade secrets from unauthorised disclosure thereby protecting the interests of the franchisor. Why is it important? Franchising has benefits for the franchisor and the franchisee. The franchisor can grow its business without having to open, staff and manage new premises or branches itself whilst the franchisee can manage his/her own business which has been already tested by the franchisor and has access to the franchisor’s experience and expertise. McDonalds and Kentucky Fried Chicken (KFC) operate their own restaurants and food outlets but also grant franchises to others to operate McDonalds and KFC businesses using their logos with McDonalds and Kentucky Fried Chicken exercising tight quality control over the restaurants, their location, food, health and safety etc.



Managing licenses

Running an online business

Protecting your IP

Business Relationships

Writing a business plan

Managing a company

Company formation

What is it?

Companies House is the UK’s ‘registrar of companies. A UK company can’t be formed without approval from Companies House therefore all company formation requests need to go through Companies House. You can apply directly or via company formation agents – who may charge slightly more than Companies House and are able to offer everything that Companies House offer, plus extra associated services.

Why is it important?

Company formation documents are the key pieces of documentation (i.e. the certificate of incorporation, memorandum of association and articles of association) that you will need to keep and refer to following your registration of your company with Companies

House. If you have access to a computer, you can form your company online in a matter of hours The prices vary but Companies House charge £12 if the formation is done online. Using the paper method via the actual IN01 form sent via post costs £40 for the standard 5-10 da service or £100 for the same-day service.

To form a company, you need the following information:

  • Proposed company name
  • The proposed Registered office address
  • Shareholder(s) details
  • Company director(s) details
  • The share capital information and the particulars relating to each class of shares
  • Details of the people with significant control details

You also need Articles of association – These set out the rules for the running of the company, including internal management affairs and legal responsibility and a Memorandum of association – This document will contain the names of the subscribers (initial shareholders) or guarantors agreeing to forming the company.

If forming your company online, the Articles of Association and Memorandum will be automatically created for you although you still have the option to create your own ‘Articles of association’ if you wish. If using the paper method, you will still have the opportunity to use prepared ‘Articles of association’ but you will need to include your own ‘Memorandum of association’ when posting your completed IN01.



Directors' service agreement

What is it?

This is a more complex contract of employment between a director/executive and an employer.

Why is it important?

It sets out the employment terms and conditions of employment and the standard areas of the employment.

Risks

As a director is more likely to be exposed to confidential information and have more responsibility this contract will include clauses which help to protect the business’s interests eg garden leave, confidentiality, non-solicitation clauses and restrictive covenants and ensure any intellectual property created by the employee- director belongs to the business..



Articles of Association

What is it?

Every company formed in England and Wales is required to have articles, without which a company cannot legally be formed. This requirement applies whether or not the company is public or private and whether limited by shares or by guarantee.

Why is it important?

The Articles of Association set out the rules for the running of the company, including internal management affairs and legal responsibility agreed by the shareholders or guarantors, directors.

The articles generally cover five essential areas:

  • Limited liability of shareholders – a fixed sum limited to the nominal value of their shares.
  • Shares and distributions – rights attaching to particular shares, issues and transfers of shares, payments of dividends and another share dealings;
  • Shareholder decision making – quorum and voting at general meetings of shareholders and various decision-making options.
  • Directors and decision making – number of directors, their powers and responsibilities and procedures for decision making; and
  • Administrative arrangements.

Our corporate solicitors can provide you with legal advice on reviewing, drafting, or amending your articles of association and other constitutional documents. We can also provide you with bespoke articles of association.



Board Resolutions

What is it? A resolution is written documentation describing an action authorized by the board of directors of a company.



EMI Schemes

What is it?

An Enterprise Management Incentive (“EMI”) scheme is an approved employee share scheme designed for smaller companies and accessible to most trading companies.

Why is it important?

It allows employers to attract and retain key staff by rewarding them with share options (equity participation ) in the business in a tax efficient way, as a reward for their efforts within the business and/or to incentivise key staff, It is ideal for smaller entrepreneurial businesses that might not be able to match salaries paid elsewhere.



Board Minutes

What is it? The minutes are a written document that describes items discussed by the directors during a board meeting, including actions taken and resolutions passed.



Share Certificates

What is it?

A Share Certificate (or stock certificate) is a written document which is evidence of a shareholder's ownership of shares in the company. The share certificate is generally issued by companies to shareholders after a transfer or transmission of shares or an allotment has been made.

Why is it important?

The share certificate will include the name of the company issuing the shares, its registration number, the details of the holders of the shares, the certificate number, the class(es) of shares being issued, date of issue, the amount paid on each share etc.

A share certificate can be issued by a private limited, public limited and unlimited liability company but cannot be issued by a company limited by guarantee as the company does not have shares.



Shareholders Agreement

What is it?

We always recommend that you put a shareholders’ agreement in place if your company has more than one shareholder.A shareholder agreement sets out the rights and obligations of each shareholder. The purpose of a shareholder agreement is to cover the most important issues in a business relationship:

  • How the shareholders will run the company
  • The mechanism for resolution of disputes between the shareholders(i.e. a “Deadlock” clause)
  • The process for valuation of the company
  • The transmission of shares in the event of the death or departure of a shareholder.

Why is it important?

A Shareholders agreement has several benefits:

  • It provides each member with clear details of their responsibilities, financial input, voting arrangements and share transfers thereby making it a strong safeguard against legal disputes and disagreements.
  • If carefully thought out and drafted it can protect individual shareholders and give them more protection that they would receive under the Model Articles of Association eg by giving each individual member a veto if the business is considering important changes
  • It is an essential agreement to have when a company has more than one shareholder as there is nothing to regulate what happens if the shareholders have a dispute or a shareholder dies.
  • It greatly reduces the risk of a shareholders’ dispute occurring and if it does it will be quicker to resolve.
  • If a shareholder is not pulling their weight or is damaging the business’s reputation the to her shareholders can vote to remove him or her and buy his or her shares for a fair price. This would be difficult to do without a shareholder’s agreement and if just relying on the standard Articles.

Our Shareholders Agreement solicitors can provide you with a professionally drafted shareholders agreement at reasonable fixed fees. Contact us today!



Managing licenses

Running an online business

Protecting your IP

Business Relationships

Writing a business plan

Settlement agreements & Ref

Joint Venture Agreement

What is it? This agreement is needed when two or more parties decide to engage in a business collaboration to deal with a particular project. There are two main types of joint ventures: i) A contractual joint venture is a contract between two parties who are looking to work together on a commercial project and pool their resources but do not want to create a separate legal entity such as a joint venture company or an LLP.(eg two businesses collaborating to bid for a contract or carry out research and development) . The collaboration will be generally be short term or for a defined period and will be of restricted scope with a well-defined purpose. ii)A corporate joint venture is a contract between two parties looking to work together on a commercial project where they will both set up a separate company (“a joint venture company”) separate from their current operations, own shares in it, have representatives from each of the companies sitting on its board and or want their company to have limited liability for the debts and obligations of the joint venture. This type of joint venture is usually suitable if you will be collaboration on a longer term project and or your collaboration will be more risky and complex and therefore justifies the time and effort of setting up a separate company.



Manufacturing Agreement

What is it? This agreement is needed if you want to employ the services of another company an individual to manufacture goods/products for you for your business. The agreement should cover a number of key areas including manufacture of the goods, materials, specification, quality control, packaging, storage, confidentiality, data protection, insurance, pricing, payment, delivery, title and risk, intellectual property, disputes, force majeure, service of notices, liability and indemnity clauses.



Memorandum of Understanding

What is it? An MOU is a pre-contract, non-binding document setting out the key terms agreed by parties who intend to enter into a binding contract. It is also known as Heads of Terms, a Letter of Intent or a Term Sheet. It is a useful tool when two or more parties intend to enter into a future contract and want to identify, describe and agree, without it being contractually binding, the terms to be further negotiated and then recorded in a contractually binding contract. There will occasionally be statements in a MOU which are exceptions to the general approach that a MOU is not binding : this will occur if the parties put in statements which the MOU expressly states are to be of legally binding effect until a definitive contract is signed. If that is the case those statements will generally be binding. Why is it important? An MOU is useful to set out the progress made during negotiations, reduce the potential for misunderstandings, indicate the major issues which still need to be resolved and make it clear what the parties intend when they enter into the contract. Risks The disadvantage of a MOU is that it can take up a considerable amount of time and may distract the parties from working on negotiating a full and detailed binding contract. There have been occasions when the parties to a proposed commercial arrangement never actually agree or sign a definite contract and have gone on to implement their deal based only on the MOU. This creates a very uncertain legal position which may lead to disputes and legal problems.



Agency Agreement

What is it? The term “agent” is often used as shorthand in a business or legal context to mean a person authorised to act for or on behalf of another who is sometimes called the “principal” As a business you need to be able to distinguish whether or not a particular arrangement amounts to a commercial agency rather than another kind of agency or relationship. This is vital if you are to understand the various legal obligations, duties and liabilities that you owe your contractors/ agents and vice versa. There are different types of individuals and companies which describe themselves as “agents”. These include for instance – commercial agents, sales agents. Employment agents, escrow agents etc. Why is it important? A commercial agent is a kind of sales agent whose relationship with their principal is largely governed by the Commercial Agents (Council Directive) Regulations 1993 whereas the relationship between any other type of sales and their principal is largely governed by the common law and not by the Regulations. A “commercial agent” is defined by the Regulations as a “…self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of their principal or to negotiate and conclude such transactions on behalf of and in the name of that principal”. Risks All commercial agency arrangements must comply with the Commercial Agents Regulations 1993. In accordance with the European Withdrawal Act 2018( ad subject to the terms of any final Brexit deal) the Regulations will remain in force post-Brexit.In contrast a sales agent is a freelance self-employed individual or contractor who may or may not work for numerous clients. You need an Agency Agreement if you want to appoint a third party to act on your behalf, marketing and selling your products and services – generally in exchange for commission on any sales. An agency agreement sets out the terms and conditions of the relationship, the commission or fees the notice period and any exclusivity rights. Other ways in which a business can expand without considerable outlay are via a distributorship and a franchise. In contrast to a distributorship, an agent earns commission on sales but does not pay for the goods, own the goods or set the sale price charged to the customer.



Referral Agreement

What is it? A referral agreement is used where, in order to obtain more customers and sales and widen Business A’s customer base or sell into a new market, a supplier of goods or services (Business A) wishes to engage another person or business (Individual B or Business B) to effect an introduction/referral of new customers to Business A in return for which the agent receives a fee for the introduction/referral itself or for the introduction/referral where it results in a sale within a stated period after the introduction/referral. It is also known as an Introduction agreement. Examples of referrers/introducers are agents who introduce a seller of a business to a potential buyer or who introduce a potential investor to a business. Why is it important? If a business colleague is referring work to you or you are the referrer you should get a referral agreement that sets out the terms of your agreement. This will help avoid problems. A referral agreement can also be used where an e-commerce website wishes to increase its sales by allowing other websites to refer customers to them in return for a commission on sales obtained through such referrals. The fees can be either a fixed fee or percentage basis with payment when the referral is made or upon the first transaction or both. The fees and payment clause can be drafted so that if the refer fails to introduce any new business they will not get a fee.There are specific referral agreements for the introduction of clients for financial services eg investment advice and insurance products.



Licensing Agreement

What is it? There are numerous types of licensing agreements eg IP licensing agreement eg a trademark licence agreement, a licence to occupy property, a software licence agreement etc.A software licence agreement is an agreement between a software licensor (generally a software developer and/or owner) and licensee who will be using the licensed software in the course of a business or personally. Why is it important? We always recommend that our clients get a licensing agreement if for example they want to give a person or another business the right to use their technology, software or any other type of intellectual property. A software licence will set out what the user may or may not do with a piece of software thereby helping developers ensure that they maximise returns on their investments, restrict others from free use of their creative and inventive work and product software that remains stable across a broad range of computer systems.



End User Licence Agreement

What is it? This is a licence agreement between a software provider and a user where software is distributed en-masse through retailers or electronically eg Microsoft and people who use its software. The different types of end-user licences include a Web Wrap software licence (designed for use with software that is distributed electronically via download ) Click Wrap Licence (designed for use with software that can be distributed electronically via download or on physical media such as a CD or DVD-Rom, Shrink Wrap Licence (designed for use in or on the packaging of software that is distributed on physical media such as a CD or DVD-Rom).



Service Level Agreement

What is it? Businesses often seek to obtain services from other businesses for various reasons. In some cases, a simple service agreement is all that is needed especially where the services in question are to be provided over a short term.However, in some cases a long-term relationship and the need for service consistency is essential. In such cases a business owner may prefer to enter into a Service Level Agreement with the service provider. Why is it important? Commonly used in the IT & Technology industries, but also applicable in other areas of business especially where large-scale or complex services are involved Service Level Agreements set out the services to be provided under a contract and also sets out the levels of performance to which those services must be provided. Detailed provisions govern the monitoring of the performance of the services and the agreement. Risks The service provider is thereby incentivised to consistently provide services in line with the agreed performance levels. If it fails to meet the agreed service levels it is subject to penalties. Service level agreements are preferable to standard service agreements as they contain much more detail, enhanced clarity and accountability over and above standard service agreements.



Partnership agreement

What is it? There are 2 main types of partnership agreements: An unlimited partnership – This is a relationship between two or more parties carrying on business together to make a profit. It is usually referred to as a “partnership” or a “general partnership” to distinguish it from other types of partnership such as a limited liability partnership. A partnership can arise by law even if there is no agreement in writing and even if the parties did not intend to create a partnership. An unlimited partnership is not a separate legal entity unlike a company or a limited liability partnership. Therefore, its partners have unlimited liability for the partnership’s debts. A limited liability partnership – Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement setting out how the LLP will be run.



LLP agreement

What is it? This agreement applies when you have a limited liability partnership. Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. Why is it important? The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement (LLP Agreement) setting out how the LLP will be run.



Distribution agreement

What is it? A distributor buys goods from a supplier to sell on to customers. They can earn a profit margin based on the “mark-up” they add to the original sale price. A Distributorship agreement is an agreement whereby the manufacturer appoints the distributor on a “sole” or “non-exclusive” basis) to resell the manufacturer’s products in a particular territory/ies. In this case, the ownership of the goods is transferred to the distributor prior to the marketing and sale of the goods which means that the distributor may hold stocks of goods which they pay for and own – they therefore bear the risk as to whether they can resell the goods. There are different types of distribution agreements eg exclusive, sole and selective distribution agreements. Business relationships can sour if based on verbal agreements. Protect your rights by ensuring you have a written distribution agreement.



Model release letter

What is it? A signed Model Release Form protects your profit margin and your copyright. Whether you work in a marketing business graphic design or are a commercial vlogger or blogger you need to ensure that any photographs that you use in your business has a properly signed release form. Whilst you do not generally need written permission to take photos, if you take photos and wish to publish the photos on the internet or in any other way or if you are starting a photography business you can protect yourself from any liability or legal proceedings by using a Model Release Form or Letter. A Model Release Form is the contract between the photographer or User and the “model” (i.e. the subject or owner of the image or photograph). Designed to protect both parties it specifies the ways in which the images or models can or cannot be used (eg for advertising, to make prints, post on social media etc), the media formats, the use or not of the model’s name, the model’s rights (or not) to inspect the end product before publication and the expiry (or not) of the release. Why is it important? A Model Release Form is not about obtaining permission to take photographs – it is about obtaining signed consent to publish the photographs for commercial purposes. Whilst it is generally okay to take pictures of a person or people in a public place without written permission if you want to use that photo for specific commercial purposes eg to promote a product on the internet or elsewhere it is best to be safe and get a signed release form from the “model” or owner of the “model”. Risks But do get legal advice before you use a release form template as it may need adapting to fit your particular needs.And remember! If you want to use images for a purpose not originally agreed, you MUST get further signed consent.



Sales agency agreement

What is it? If you are a business selling products you may decide to employ the services of a sales agent. A sales agent is a freelance self-employed business or contractor who might or might not work for several clients. The term “sales agent” includes a “commercial agent” but it is usual to distinguish the two forms of agency by referring to someone as a sales agent only if they are not a “commercial agent” as the legal position of a “commercial agent” differs substantially from other forms of “sales agency”. The business that owns the products will be called the “Principal” and the sales agent will be called the “Agent”. The sales agent is paid commission only and so is motivated to make as many sales as possible to maximise their income.Central to the relationship between a business and their sales agent will be the “Agency Agreement”. The Sales Agency agreement will set out the product the agent will be selling, where the agent will be selling those products, how the sales are to take place, commission payable on all sales and the key rights and responsibilities of the parties. Why is it important? The use of sales agents as opposed to an employed sales team has a number of benefits for the business (i.e. the “Principal”) since commission is only payable on achieved sales, there are no fixed employment costs, and the agent will often already have a network of contacts ie established customer base, will know the market in their area and will have credibility with their customer base.



Sub-contracting agreement

What is it? Many business contracts allow one or both parties to sub-contract all or part of their obligations under a contract. This can be done via a letter termed a “Notice of Intention to Sub-contract” from the main contractor to the other party to the main contract or via a formal “Sub-contracting” agreement. Where a “Notice of intention to sub-contract” letter is used, the main contractor (ie sender of the letter) would inform the other party to the contract (ie the recipient of the letter) that the main contractor intends to subcontract certain of their obligations under a contract and will provide details of the subcontractor(s) to whom the obligations will be sub-contracted, a detailed description of the obligations to be sub-contracted with cross-references to the relevant parts of the Contract agreement between the main contractor and the other party to the contract agreement. The recipient will also be reminded that they are not a party to the sub-contract and that the main contractor will remain their primary contact person and will also remain liable for any acts of omissions of the subcontractors. As an option, the main contractor may also decide to enter into a formal “Sub-contracting” agreement with the sub-contractor and send a copy of this to



Franchise Agreement

What is it? Franchising your business lets you licence your business model to companies or individual in particular geographical areas and allows you to increase your profits while maintaining a significant degree of control over your brand. A Franchise agreement is an agreement under which the owner of a business grants a licence or licences to others (the “franchisees”) to operate that business in a particular area within the UK or internationally either on a “sole” or “non-exclusive” basis, for a fee therefore spreading their corporate identity and products or services without the expense of setting up new establishments. All franchisees will use a common identity including the name, trademarks, goodwill, other intellectual property and or products of the franchisor. The franchisor will also provide a “Quality Manual” which in effect is a rule book setting out all the relevant detail needed for the successful day-to-day running of the franchised business eg minimum standards and insurance requirements. The agreement will usually include a confidentiality clause protecting all commercially sensitive information and trade secrets from unauthorised disclosure thereby protecting the interests of the franchisor. Why is it important? Franchising has benefits for the franchisor and the franchisee. The franchisor can grow its business without having to open, staff and manage new premises or branches itself whilst the franchisee can manage his/her own business which has been already tested by the franchisor and has access to the franchisor’s experience and expertise. McDonalds and Kentucky Fried Chicken (KFC) operate their own restaurants and food outlets but also grant franchises to others to operate McDonalds and KFC businesses using their logos with McDonalds and Kentucky Fried Chicken exercising tight quality control over the restaurants, their location, food, health and safety etc.



Managing licenses

Running an online business

Protecting your IP

Business Relationships

Writing a business plan

Commercial notices

Software Development Agreement

What is it? Software is intellectual property. A software development agreement is an agreement between a business or an individual and a developer by which the individual or business hires the developer to create and deliver a specific piece of software. Why is it important? This agreement is important as it clarifies the relationship between the developer and the hirer or employer. Risks When you engage a software developer if you want the software created to belong to your company or to you, you must ensure that you agree and insert an ownership clause in the agreement. If there is no ownership clause the software created by the developer will automatically belong to the developer even if your company has spent millions of pounds developing the software.



Freelancer Agreement

What is it? You may use a self-employed freelancer to do a specific task eg work on a project, design your website or do your marketing for a specific period.The standard contract used to hire a freelancer is a consultancy agreement. This agreement clarifies the basic terms of your relationship with the freelancer eg the work to be done, fees payable and other terms of the agreement eg a non-solicitation clause, confidentiality clause, data protection, ownership of any intellectual property created by the freelancer, indemnification clause for any losses you incur due to the freelancer’s breaches of third party intellectual property. Etc. A company consultancy agreement is used to hire a freelancer who operates through their own limited company. An individual consultancy agreement is used to hire a freelancer directly. Why is it important? More specialist freelancers may want you to sign up to their own bespoke terms and conditions when you instruct them. If that is the case you must ensure that you check all the clauses carefully to ensure that they do not conflict with your requirements and that you are happy with the terms eg consultant to be liable for breaches of your Intellectual property and third party intellectual property, confidentiality, fee payable, data protection, indemnification clause etc. Risks You should also ensure that you are aware of the IR35 tax rules. If a freelancer is providing services to you through a company your arrangement may be subject to the IR35 tax rules. This means that the freelancer may have to pay tax and national insurance as if they were employed by you. HMRC has a useful tool at www.gov.uk to enable businesses check employment status for tax purposes. From April 2020 if you are a medium or large business the responsibility for determining whether the IR35 tax rules applies to the consultancy and for payment of the income tax and national insurance on behalf of the freelancer lies with the company to whom the freelancer provides the services. If you are a “small business” (i.e. a business which satisfies two or more of the following requirements – i) a turnover of £10.2 million or less, ii) no more than 50 staff and iii) a balance sheet f no more than £5.1million the responsibility for determining whether the IR35 tax rules apply and for payment of the tax and national insurance lies with the freelancer.



Internship Agreement

What is it? An intern may be a volunteer, a worker or an employee. An internship agreement is an agreement between an intern and an employer where the intern agrees to provide their services in exchange for training provided by the employer or business with no expectation that the internship will result in employment with the business. Why is it important? If your intern will just be shadowing staff and will be unpaid you won’t need a contract but it is good practice to send your intern a letter confirming the agreement terms. If you want your intern to work for your business rather than just shadow staff your intern will either be an employee or a casual worker. Risks You must have a proper contract for their status and treat them accordingly. If your intern is an employee or a casual work you must pay them the national minimum wage(NMW). If you do not pay them the NMW you are at risk of HMRC prosecuting you or the intern suing you in court.



Staff Handbook

What is it? A Staff handbook is an important living document for your employees that sets out your company’s operational policies, values and culture for current and future employees. There is no legal obligation to have a staff handbook, however as there are certain policies that you must give your employees by law (eg disciplinary and grievance policies and health and safety policies) it is best practice to start a handbook when you hire your first employee as it sets expectations for what behaviour is acceptable and desirable across your business and can protect you legally. Why is it important? A staff handbook can be contractual or non-contractual(i.e. binding or non-binding). It is best practice to make it non-contractual so that you can change it at your discretion without having to consult staff. Make sure you keep your handbook updated to reflect the law and ensure that the issue date is clearly shown on the handbook. Risks If you do not have a staff handbook and you are in dispute or engaged in legal proceedings with an employee it will be more difficult to verify your policies and procedures.



Job description

What is it? A job description sets out the scope of the role (i.e. duties and responsibilities), any skills, experience and qualifications required, the ethos and culture of your business, salary and other staff benefits. It is important as it helps you clarify what you are looking for and will also help candidates determine whether they have the skills and experience for the role. Why is it important? Always review your job description before every recruitment exercise to ensure it accurately describes the job in question. Failing to do so may dissuade suitable candidates from applying or encourage unsuitable candidates to apply. Risks It is essential that you avoid using discriminatory words in your job description eg “bright, energetic, young man” or “ an Italian” person when you actually require someone who speaks Italian as these would indicate a preference based on gender, disability, age and ethnicity.



Job offer letter

What is it? You should always confirm a job offer in writing and ask the candidate to confirm their acceptance of the offer. Why is it important? A job offer letter is a letter offering employment after an interview and summarising the basic terms of employment (if you are providing the employment contract with the offer letter) or summarising the main employment terms (if you will not be providing the employment contract until a later date) Risks Always ensure that the offer letter specifies the conditions to which the offer is subject eg “subject to satisfactory references” and that you retain a signed copy of the offer letter and contract in the staff member’s personnel records.



Non-executive director letter of appointment

What is it? This is a formal letter appointing a person as a non-executive director of a company. It sets out the key terms of the appointment and the director’s duties and responsibilities. Why is it important? As a director is more likely to be exposed to confidential information and have more responsibility this contract will include clauses which help to protect the business’s interests eg garden leave, confidentiality, non-solicitation clauses and restrictive covenants.



Senior employment contract

What is it? This is a more complex contract of employment between a senior employee or director/executive and an employer . It sets out the employment terms and conditions of employment and the standard areas of the employment. Why is it important? As a senior executive is more likely to be exposed to confidential information and have more responsibility this contract will include clauses which help to protect the business’s interests eg garden leave, confidentiality, non-solicitation clauses and restrictive covenants and ensure any intellectual property created by the employee belongs to the business.



Zero hours contract

What is it? This is a casual agreement between an individual and a business where the worker works “as and when” the employer needs the labour. There is no guarantee of any set hours and the worker is not obliged to work the hours offered. Why is it important? A zero-hours contract should be used where the business simply wishes to hire a worker on a casual basis and would benefit from not having to give the worker a guaranteed number of hours and days of work. This contract is useful for seasonal work or special events eg in the agriculture business, hospitality and catering business; when a business is entering a new market and is unsure of how many staff members it will need; in cases of unexpected absence from work eg to provide cover where there is sudden sickness or absence from work etc. They are often used in the healthcare, agriculture, hotels, restaurants and education sectors. In the UK workers operating under zero-hours contracts are entitled to rest breaks, annual leave, sick pay and protection from discrimination and must be paid the national minimum wage for hours worked. Risks Zero-hours contracts are controversial due to the uncertainty of the work and the fact there is no guaranteed employment. They do however serve a purpose by providing a flexible labour market and a route into more permanent employment. You should ensure that your zero-hours contract clearly sets out your employee’s employee status, rights and obligations.



Consultancy agreement

What is it? A consultancy agreement is a contract between a self-employed person (Consultant) and a customer requiring the consultant’s services.It is similar to the standard contract used to hire a freelancer. Why is it important? This agreement clarifies the basic terms of your relationship with the freelancer eg the work to be done, fees payable and other terms of the agreement eg a non-solicitation clause, confidentiality clause, data protection, ownership of any intellectual property created by the freelancer, indemnification clause for any losses you incur due to the freelancer’s breaches of third party intellectual property. Etc. More specialist freelancers may want you to sign up to their own bespoke terms and conditions when you instruct them. If that is the case you must ensure that you check all the clauses carefully to ensure that they do not conflict with your requirements and that you are happy with the terms eg consultant to be liable for breaches of your Intellectual property and third party intellectual property, confidentiality, fee payable, data protection, indemnification clause etc. Risks You should also ensure that you are aware of the IR35 tax rules. If a freelancer is providing services to you through a company your arrangement may be subject to the IR35 tax rules. This means that the freelancer may have to pay tax and national insurance as if they were employed by you. HMRC has a useful tool at www.gov.uk to enable businesses check employment status for tax purposes. From April 2020 if you are a medium or large business the responsibility for determining whether the IR35 tax rules applies to the consultancy and for payment of the income tax and national insurance on behalf of the freelancer lies with the company to whom the freelancer provides the services. If you are a “small business” (i.e. a business which satisfies two or more of the following requirements – i) a turnover of £10.2 million or less, ii) no more than 50 staff and iii) a balance sheet f no more than £5.1million the responsibility for determining whether the IR35 tax rules apply and for payment of the tax and national insurance lies with the freelancer.



Employment contract

What is it? An employment contract is an agreement between the employer and employee setting out the rights and duties of the employer and employee. An employment agreement is vital as it forms the legal relationship between the employer and the employee. Why is it important? If you have employees, you are legally obliged to provide them with a written statement of their basic terms of employment in writing no later than two months after they start work. From 6 April 2020 this obligation will extend to casual workers and all new employees must be provided with this written statement and additional information on or before the staff member’s first day of work. Risks If things go wrong an employment agreement will clarify the legal relationship between the employer and employee and will help the court or tribunal in providing a solution in the event of a dispute between the employer and employee. Think of an employment contract as your passport to nurturing good employment relations with your staff and running a good, progressive business. If your employee will be part-time do note that part-time staff and fixed term staff (temporary employees) must be treated equally with full-time staff. This means that a part-time or temporary employee on the same role must get the same pay or benefits as a comparable full-time member of staff pro-rated for the length of time they will be with you. Comparable employees are those doing the same or broadly similar work at the same place of work or at a different location.



Change to employment terms letter

What is it?

As an employer sometimes you may have business reasons that means you need to change your employees terms and conditions of employment (eg basic rate, overtime, bonus, working location, duties and responsibilities, hours/days of work, holiday or sick pay entitlement). This is called a “variation” of the contracts of employment.

Why is it important?

You can only do this if (a) you have a provision in the contract that allows the change. This clause is usually called a “flexibility clause” and may be in your contract or Company Handbook. (b) the employees agree the change or (c) the employees representative eg a Trade Union agrees the change.

Risks

You must have sound business reasons for making any change and follow a fair consultation procedure with your employees before you introduce the changes. If the employees do not agree the change and you believe that it is a reasonable change you can force a new contract on your employees. However, this should be used only as a last resort as it could lead to an employee raising a grievance and ultimately a claim to an Employment Tribunal. Once the change has been agreed you should ensure that each employee signs the new contract to confirm the employee has accepted the change and that you keep a copy.

Please contact our employment solicitors if you are thinking of making a change to your employment contracts.



Working time directive opt out letter

What is it? The Working Time Directive prevents employees from being forced to work more than 48 hours per week unless they freely agree to opt out of the directive. To opt out of the 48 hours limit your employees can sign an “Opt-out of the Working Time Directive Agreement”. Why is it important? This is an agreement between an employer and a worker or employee for the purposes of the Working Time Regulations 1998 whereby the employee or worker agrees to opt-out of the maximum weekly working time limit of 48 hours for a period or indefinitely. Such agreements are usually signed by doctors, police officers a, long-haulage truck drivers and others whose jobs necessitate long working hours. Risks You cannot sack or treat your employee unfairly if they refused to opt out.



Probation letter

What is it? A probation letter is a letter by which an employer informs an employee that their probation period has finished and tells them the outcome of the probation. The outcome may be threefold: (a) that the employee has successfully completed their probationary period and their employment will continue OR (b) the employee’s probation will be extended as the employee’s performance needs to improve OR (c) the employee’s employment is being terminated as the employee has not met the company’s performance requirements. Our employment solicitors can provided you with a suite of sample employment probation letters to use as a guide. Employers should adapt the content to suit their requirements and or contact us for further advice if required.



Flexible working request

What is it? An employee can make a “flexible working request” to their employer if they want to work part-time instead of full-time, change their start and finishing times, work compressed hours(i.e. do their standard hours over fewer days), job-share or do “flexi-time”. Flexitime is where an employee is granted permission to be flexible with their start and finish times. Why is it important? The law provides that an employee has the right to make a flexible working request if (a) the employee has worked for their employer for at least 26 weeks (b) the member of staff is legally classed as an employee and (c) the employee has not made any other flexible working request in the last 12 months. By law, if the employee has the right to make the request the employer is obliged to look at the request fairly in accordance with the Acas Code of Practice on flexible working requests and, make a decision within 3 months.



Grievance letter

What is it?

A grievance is a concern, problem or complaint raised by an employee in the workplace about their work, their manager, other staff member or the workplace. It could be about the employee’s pay and benefits, work conditions, workload, bullying or harassment. There is no legally binding process that an employer must follow when handling a grievance at work. However, it is best practice as an employer to have a grievance procedure.

Why is it important?

A grievance procedure is one of the ways to resolve a problem at work. This procedure can be set out in the employment contract, company handbook, HR intranet site or in your Human Resources manual.

Risks

If you do not have a grievance procedure you should ensure that you follow the Acas Code of Practice on Disciplinary and Grievance procedures if an employee comes to you with a grievance.

When an employee raises a workplace grievance you must take them seriously. Whether or not the grievance is valid you must investigate the grievance as it could be having a negative effect on the staff concerned and may lead to disgruntled staff and loss of valuable staff. Having an informal chat when an employee comes to you with an issue may be all that is needed. If the chat does not resolve the problem, you must investigate the problem .An employee should not be dismissed or treated unfairly for raising a genuine grievance.

An employee who is disadvantaged or dismissed for raising a grievance can raise a claim in the Employment Tribunal for unfair dismissal or automatic unfair dismissal. An employee would usually be expected to lodge a grievance before claiming constructive dismissal otherwise any damages awarded the employee at the Employment Tribunal could be reduced.

Avoid grievances in your workplace by contacting Pure Business law, your expert employment lawyers.



Managing licenses

Running an online business

Protecting your IP

Business Relationships

Writing a business plan

Letting a commercial property

Joint Venture Agreement

What is it? This agreement is needed when two or more parties decide to engage in a business collaboration to deal with a particular project. There are two main types of joint ventures: i) A contractual joint venture is a contract between two parties who are looking to work together on a commercial project and pool their resources but do not want to create a separate legal entity such as a joint venture company or an LLP.(eg two businesses collaborating to bid for a contract or carry out research and development) . The collaboration will be generally be short term or for a defined period and will be of restricted scope with a well-defined purpose. ii)A corporate joint venture is a contract between two parties looking to work together on a commercial project where they will both set up a separate company (“a joint venture company”) separate from their current operations, own shares in it, have representatives from each of the companies sitting on its board and or want their company to have limited liability for the debts and obligations of the joint venture. This type of joint venture is usually suitable if you will be collaboration on a longer term project and or your collaboration will be more risky and complex and therefore justifies the time and effort of setting up a separate company.



Manufacturing Agreement

What is it? This agreement is needed if you want to employ the services of another company an individual to manufacture goods/products for you for your business. The agreement should cover a number of key areas including manufacture of the goods, materials, specification, quality control, packaging, storage, confidentiality, data protection, insurance, pricing, payment, delivery, title and risk, intellectual property, disputes, force majeure, service of notices, liability and indemnity clauses.



Memorandum of Understanding

What is it? An MOU is a pre-contract, non-binding document setting out the key terms agreed by parties who intend to enter into a binding contract. It is also known as Heads of Terms, a Letter of Intent or a Term Sheet. It is a useful tool when two or more parties intend to enter into a future contract and want to identify, describe and agree, without it being contractually binding, the terms to be further negotiated and then recorded in a contractually binding contract. There will occasionally be statements in a MOU which are exceptions to the general approach that a MOU is not binding : this will occur if the parties put in statements which the MOU expressly states are to be of legally binding effect until a definitive contract is signed. If that is the case those statements will generally be binding. Why is it important? An MOU is useful to set out the progress made during negotiations, reduce the potential for misunderstandings, indicate the major issues which still need to be resolved and make it clear what the parties intend when they enter into the contract. Risks The disadvantage of a MOU is that it can take up a considerable amount of time and may distract the parties from working on negotiating a full and detailed binding contract. There have been occasions when the parties to a proposed commercial arrangement never actually agree or sign a definite contract and have gone on to implement their deal based only on the MOU. This creates a very uncertain legal position which may lead to disputes and legal problems.



Agency Agreement

What is it? The term “agent” is often used as shorthand in a business or legal context to mean a person authorised to act for or on behalf of another who is sometimes called the “principal” As a business you need to be able to distinguish whether or not a particular arrangement amounts to a commercial agency rather than another kind of agency or relationship. This is vital if you are to understand the various legal obligations, duties and liabilities that you owe your contractors/ agents and vice versa. There are different types of individuals and companies which describe themselves as “agents”. These include for instance – commercial agents, sales agents. Employment agents, escrow agents etc. Why is it important? A commercial agent is a kind of sales agent whose relationship with their principal is largely governed by the Commercial Agents (Council Directive) Regulations 1993 whereas the relationship between any other type of sales and their principal is largely governed by the common law and not by the Regulations. A “commercial agent” is defined by the Regulations as a “…self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of their principal or to negotiate and conclude such transactions on behalf of and in the name of that principal”. Risks All commercial agency arrangements must comply with the Commercial Agents Regulations 1993. In accordance with the European Withdrawal Act 2018( ad subject to the terms of any final Brexit deal) the Regulations will remain in force post-Brexit.In contrast a sales agent is a freelance self-employed individual or contractor who may or may not work for numerous clients. You need an Agency Agreement if you want to appoint a third party to act on your behalf, marketing and selling your products and services – generally in exchange for commission on any sales. An agency agreement sets out the terms and conditions of the relationship, the commission or fees the notice period and any exclusivity rights. Other ways in which a business can expand without considerable outlay are via a distributorship and a franchise. In contrast to a distributorship, an agent earns commission on sales but does not pay for the goods, own the goods or set the sale price charged to the customer.



Referral Agreement

What is it? A referral agreement is used where, in order to obtain more customers and sales and widen Business A’s customer base or sell into a new market, a supplier of goods or services (Business A) wishes to engage another person or business (Individual B or Business B) to effect an introduction/referral of new customers to Business A in return for which the agent receives a fee for the introduction/referral itself or for the introduction/referral where it results in a sale within a stated period after the introduction/referral. It is also known as an Introduction agreement. Examples of referrers/introducers are agents who introduce a seller of a business to a potential buyer or who introduce a potential investor to a business. Why is it important? If a business colleague is referring work to you or you are the referrer you should get a referral agreement that sets out the terms of your agreement. This will help avoid problems. A referral agreement can also be used where an e-commerce website wishes to increase its sales by allowing other websites to refer customers to them in return for a commission on sales obtained through such referrals. The fees can be either a fixed fee or percentage basis with payment when the referral is made or upon the first transaction or both. The fees and payment clause can be drafted so that if the refer fails to introduce any new business they will not get a fee.There are specific referral agreements for the introduction of clients for financial services eg investment advice and insurance products.



Licensing Agreement

What is it? There are numerous types of licensing agreements eg IP licensing agreement eg a trademark licence agreement, a licence to occupy property, a software licence agreement etc.A software licence agreement is an agreement between a software licensor (generally a software developer and/or owner) and licensee who will be using the licensed software in the course of a business or personally. Why is it important? We always recommend that our clients get a licensing agreement if for example they want to give a person or another business the right to use their technology, software or any other type of intellectual property. A software licence will set out what the user may or may not do with a piece of software thereby helping developers ensure that they maximise returns on their investments, restrict others from free use of their creative and inventive work and product software that remains stable across a broad range of computer systems.



End User Licence Agreement

What is it? This is a licence agreement between a software provider and a user where software is distributed en-masse through retailers or electronically eg Microsoft and people who use its software. The different types of end-user licences include a Web Wrap software licence (designed for use with software that is distributed electronically via download ) Click Wrap Licence (designed for use with software that can be distributed electronically via download or on physical media such as a CD or DVD-Rom, Shrink Wrap Licence (designed for use in or on the packaging of software that is distributed on physical media such as a CD or DVD-Rom).



Service Level Agreement

What is it? Businesses often seek to obtain services from other businesses for various reasons. In some cases, a simple service agreement is all that is needed especially where the services in question are to be provided over a short term.However, in some cases a long-term relationship and the need for service consistency is essential. In such cases a business owner may prefer to enter into a Service Level Agreement with the service provider. Why is it important? Commonly used in the IT & Technology industries, but also applicable in other areas of business especially where large-scale or complex services are involved Service Level Agreements set out the services to be provided under a contract and also sets out the levels of performance to which those services must be provided. Detailed provisions govern the monitoring of the performance of the services and the agreement. Risks The service provider is thereby incentivised to consistently provide services in line with the agreed performance levels. If it fails to meet the agreed service levels it is subject to penalties. Service level agreements are preferable to standard service agreements as they contain much more detail, enhanced clarity and accountability over and above standard service agreements.



Partnership agreement

What is it? There are 2 main types of partnership agreements: An unlimited partnership – This is a relationship between two or more parties carrying on business together to make a profit. It is usually referred to as a “partnership” or a “general partnership” to distinguish it from other types of partnership such as a limited liability partnership. A partnership can arise by law even if there is no agreement in writing and even if the parties did not intend to create a partnership. An unlimited partnership is not a separate legal entity unlike a company or a limited liability partnership. Therefore, its partners have unlimited liability for the partnership’s debts. A limited liability partnership – Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement setting out how the LLP will be run.



LLP agreement

What is it? This agreement applies when you have a limited liability partnership. Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. Why is it important? The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement (LLP Agreement) setting out how the LLP will be run.



Distribution agreement

What is it? A distributor buys goods from a supplier to sell on to customers. They can earn a profit margin based on the “mark-up” they add to the original sale price. A Distributorship agreement is an agreement whereby the manufacturer appoints the distributor on a “sole” or “non-exclusive” basis) to resell the manufacturer’s products in a particular territory/ies. In this case, the ownership of the goods is transferred to the distributor prior to the marketing and sale of the goods which means that the distributor may hold stocks of goods which they pay for and own – they therefore bear the risk as to whether they can resell the goods. There are different types of distribution agreements eg exclusive, sole and selective distribution agreements. Business relationships can sour if based on verbal agreements. Protect your rights by ensuring you have a written distribution agreement.



Model release letter

What is it? A signed Model Release Form protects your profit margin and your copyright. Whether you work in a marketing business graphic design or are a commercial vlogger or blogger you need to ensure that any photographs that you use in your business has a properly signed release form. Whilst you do not generally need written permission to take photos, if you take photos and wish to publish the photos on the internet or in any other way or if you are starting a photography business you can protect yourself from any liability or legal proceedings by using a Model Release Form or Letter. A Model Release Form is the contract between the photographer or User and the “model” (i.e. the subject or owner of the image or photograph). Designed to protect both parties it specifies the ways in which the images or models can or cannot be used (eg for advertising, to make prints, post on social media etc), the media formats, the use or not of the model’s name, the model’s rights (or not) to inspect the end product before publication and the expiry (or not) of the release. Why is it important? A Model Release Form is not about obtaining permission to take photographs – it is about obtaining signed consent to publish the photographs for commercial purposes. Whilst it is generally okay to take pictures of a person or people in a public place without written permission if you want to use that photo for specific commercial purposes eg to promote a product on the internet or elsewhere it is best to be safe and get a signed release form from the “model” or owner of the “model”. Risks But do get legal advice before you use a release form template as it may need adapting to fit your particular needs.And remember! If you want to use images for a purpose not originally agreed, you MUST get further signed consent.



Sales agency agreement

What is it? If you are a business selling products you may decide to employ the services of a sales agent. A sales agent is a freelance self-employed business or contractor who might or might not work for several clients. The term “sales agent” includes a “commercial agent” but it is usual to distinguish the two forms of agency by referring to someone as a sales agent only if they are not a “commercial agent” as the legal position of a “commercial agent” differs substantially from other forms of “sales agency”. The business that owns the products will be called the “Principal” and the sales agent will be called the “Agent”. The sales agent is paid commission only and so is motivated to make as many sales as possible to maximise their income.Central to the relationship between a business and their sales agent will be the “Agency Agreement”. The Sales Agency agreement will set out the product the agent will be selling, where the agent will be selling those products, how the sales are to take place, commission payable on all sales and the key rights and responsibilities of the parties. Why is it important? The use of sales agents as opposed to an employed sales team has a number of benefits for the business (i.e. the “Principal”) since commission is only payable on achieved sales, there are no fixed employment costs, and the agent will often already have a network of contacts ie established customer base, will know the market in their area and will have credibility with their customer base.



Sub-contracting agreement

What is it? Many business contracts allow one or both parties to sub-contract all or part of their obligations under a contract. This can be done via a letter termed a “Notice of Intention to Sub-contract” from the main contractor to the other party to the main contract or via a formal “Sub-contracting” agreement. Where a “Notice of intention to sub-contract” letter is used, the main contractor (ie sender of the letter) would inform the other party to the contract (ie the recipient of the letter) that the main contractor intends to subcontract certain of their obligations under a contract and will provide details of the subcontractor(s) to whom the obligations will be sub-contracted, a detailed description of the obligations to be sub-contracted with cross-references to the relevant parts of the Contract agreement between the main contractor and the other party to the contract agreement. The recipient will also be reminded that they are not a party to the sub-contract and that the main contractor will remain their primary contact person and will also remain liable for any acts of omissions of the subcontractors. As an option, the main contractor may also decide to enter into a formal “Sub-contracting” agreement with the sub-contractor and send a copy of this to



Franchise Agreement

What is it? Franchising your business lets you licence your business model to companies or individual in particular geographical areas and allows you to increase your profits while maintaining a significant degree of control over your brand. A Franchise agreement is an agreement under which the owner of a business grants a licence or licences to others (the “franchisees”) to operate that business in a particular area within the UK or internationally either on a “sole” or “non-exclusive” basis, for a fee therefore spreading their corporate identity and products or services without the expense of setting up new establishments. All franchisees will use a common identity including the name, trademarks, goodwill, other intellectual property and or products of the franchisor. The franchisor will also provide a “Quality Manual” which in effect is a rule book setting out all the relevant detail needed for the successful day-to-day running of the franchised business eg minimum standards and insurance requirements. The agreement will usually include a confidentiality clause protecting all commercially sensitive information and trade secrets from unauthorised disclosure thereby protecting the interests of the franchisor. Why is it important? Franchising has benefits for the franchisor and the franchisee. The franchisor can grow its business without having to open, staff and manage new premises or branches itself whilst the franchisee can manage his/her own business which has been already tested by the franchisor and has access to the franchisor’s experience and expertise. McDonalds and Kentucky Fried Chicken (KFC) operate their own restaurants and food outlets but also grant franchises to others to operate McDonalds and KFC businesses using their logos with McDonalds and Kentucky Fried Chicken exercising tight quality control over the restaurants, their location, food, health and safety etc.



Managing licenses

Running an online business

Protecting your IP

Business Relationships

Writing a business plan

Sale and Purchase of Commerial Property

Trademark (UK, EU, US, China)

What is it? One of the best ways of protecting your business name, brand and logo from being copied is to register a trademark. A trademark is a distinctive sign eg name, brand, logo or tagline (or a combination of these) used by a business to distinguish its goods and or services from those sold by another business and to identify its business as the source of those goods and services. In the UK, trademarks are granted by the UK Intellectual Property Office (UK IPO) Registering a trademark increases the protection it receives and stops others from using it. You may be able to register a trademark over:

  • words (eg the trademark “Nandos”)
  • pictures and words (eg the Pure Business Law trademark).
  • slogans (eg the Lidl strap line “Big on quality, Lidl on price”)
  • colours (eg the Cadbury Dairy Milk purple as owned by Kraft ).
  • sounds (eg the Match of the Day theme song played when their logo appears at the beginning of football matches) and
  • Logos (eg the Mac OS logo);
  • 3D shapes (eg the Pepsi cola bottle shape)
Why is it important? Registering a name or a logo gives you the following three benefits: Allows you to object if someone else applies to register ay name or logo that is similar to your trademark for the same of similar goods or services. This protection does not cover an application to use the same name or branding for a different type of business. For instance if you register “Fast-Sports” for a trade mark for selling sports cars, no one could register “Fast-Spots” for anything to do with selling cars but they may be able to register it as a trade mark for a dry-cleaning business because that has nothing to do with cars. If another business tries to use the same or similar branding on similar goods or services thereby infringing your trademark you can take legal proceedings to stop them. Your business’s goodwill and reputation have commercial value so registering a trademark is an easy way to protect your hard work and creativity. Registering a trademark gives you the exclusive right to use it for 10 years, after which you must make an application to renew it to the Intellectual Property Office (IPO). Their website is at www.ipo.gov.uk. You can register your trademarks in the UK, the EU and or internationally. All registrations last for 10years and are renewable indefinitely in further 10-year periods. The most suitable registration for your brand will depend on where you do business eg UK, EU or internationally. Risks If you do not register your name, brand or logo as a trademark you will not be able to easily stop other people using your trademark and you may end up allowing other businesses to profit from your hard work.



Patent (Worldwide)

What is it? Protect your invention through a patent. A patent gives you an exclusive right over a novel invention that you have created. It gives you the exclusive right to use and reproduce your invention and stop people copying your invention without your permission. For instance, only Apple can make and sell Apple phones. In the UK, patents are granted by the UK Intellectual Property Office (UK IPO) To have a patent over something you have created, you must register it at the IPO. Patents generally last for up to twenty years. You can only patent a novel invention and cannot patent something that is already in the public domain. This means that your invention must be new (i.e. you cannot patent something which already exists eg a literary work, method of medical treatment, a diagnosis, scientific theory or a discovery) . You also cannot patent something which is already the subject of a patent application pre-dating your application. This means that you must carry out extensive market research examining trade journals and academic papers relevant to your industry market and searching for patents and patent applications on the patent registers worldwide. Obtaining a patent is expensive and time consuming. You should enlist the help of a professional eg lawyer or patent agent before starting an application for a patent. Why is it important?
Should I register my invention as a patent? Yes, you should if you believe that you have created a novel product or process which is so important to your business that you wish to pay a patent application fee to prevent others from using it. Risks Registering your invention as a patent ensures that:

  1. You can prevent others using your product or process if they intend to use it for commercial purposes.
  2. You can profit from your patent by only permitting certain people to use it for commercial purposes and only on condition that they pay you or give you a percentage of the profits they make from using your patent.
Risks If you do not register your invention as a patent, you will not be able to easily stop other people copying your ideas and you may end up allowing other businesses to profit from your hard work. You can use free online databases to search for patents eg Ipsum the UK IPO’s search facility, the Patents Journal (for UK applications that have been filed but not yet published), Espacenet – the European Patents Office’s (EPO’s) free database for worldwide patents including UK patents and Patentscope – the World Intellectual Property Organisation’s (WIPO’s ) free database for worldwide patents including UK patents. Note that these databases may not be up to date. As an alternative you may prefer to use professional search services such as:
  1. The PATLIB (patent library) centre
  2. A Patent attorney through the Chartered Institute of Patent Attorneys at www.cipa.org.uk



IP Assignment Agreement

What is it? An IP assignment agreement transfers rights and ownership in an IP created by one person to someone else or to a business. It can be used to transfer rights in a trademark, patent, logo, designs or any other IP. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work.



Registering Designs

What is it? Register your design to stop someone else from using it. A design right is a right that you have which can protect your original design from being copied by someone else.There are two different types of design rights – registered and unregistered design rights which can protect the look or appearance of a product from being copied. Why is it important? Design rights can exist in computer icons, logos, graphic designs, packaging and clothing. The rights do not arise by reference to the particular product but rather in the shape or look of either the whole of the product or part of that product. For instance, a registered design right in a motif used on a book will be infringed if someone else uses the same design motif on a duvet cover. In the UK, design registrations are granted by the UK Intellectual Property Office (UK IPO). Risks Even if you do not register your design, it will still be automatically protected as an unregistered design right. However this right is more limited right because it only protects you against unauthorised copying and does not prevent other people creating similar designs independently. For businesses in the UK these unregistered design rights arise automatically in the UK and the EU for some designs under both UK and EU law if the relevant criteria are met. In the UK, unregistered design rights arise as soon as the relevant designs are recorded in some way eg in a drawing and in the UK as soon as they are made available to the public. However, the protection granted differs slightly in each jurisdiction. For instance in the UK unregistered design rights will automatically protect either the shape or configuration of the whole or part of an article for up to 15 years, whereas in the EU unregistered design rights will automatically protect not only the appearance of the whole or part of any industrial or handicraft product resulting from its features but also its lines, shape, texture, contours and materials but only for up to 3 years. You should therefor keep a watching brief and consider whether such a right has arisen as soon as you believe that either you or your employees (in the course of their employment) have created an original design. Brexit The UK and the EU have agreed that there will be an implementation period (ie transition period) from the date the UK left the EU i.e. 31 January 2020 until 31 December 2020 or a later date if the transition period is extended. During this period there will be no changes to unregistered design rights. UK unregistered design rights UK unregistered design rights will continue after the transition period and provide up to 15 years of protection. However, after the transition period the UK Government has advised that only UK residents or businesses incorporated in the UK will be eligible for UK registered designs. EU unregistered design rights From the end of the transition period unregistered design rights in the EU (ie unregistered Community designs) will no longer be valid in the IK. The government has advised that it will immediately replace the unregistered Community design rights with UK unregistered design rights ( to be known as UK continuing unregistered design rights) and which will offer protection in the EU and UK for the rest of the three year terms previously attached to the unregistered Community design right. This means you will continue to be protected in the EU and UK for unregistered Community designs that existed before the end of the transition period. If you are concerned about how to protect your unregistered design rights in the UK and EU after the transition period please contact our IP lawyers for further advice on 01234 938089.



Non-Disclosure Agreement (NDA)/Letter of confidentiality

What is it? This agreement protects confidential information belonging to your business including IP and other information which you do not want to be made public. Why is it important? It is important to have an NDA in place before sharing any confidential or sensitive information in business meetings with people with whom you intend to do business eg investors, prospective co-founders, suppliers, consultants and the like. A letter of confidentiality is similar to a non-disclosure agreement. The party disclosing confidential information imposes restrictions as to the use of this confidential information to the party receiving it. Risks If you do not have the required safeguards in place to protect your intellectual property during business meetings or negotiations you may have your designs, inventions or work stolen or copied by the person with whom you are negotiating. This could be disastrous for your business.



one-way confidentiality agreement

What is it? A one-way Confidentiality agreement is similar to a non-disclosure agreement but imposes restrictions as to the use of this confidential information only on one party.



Assignment of intellectual property

What is it? An IP assignment agreement transfers rights and ownership in an IP created by one-person eg trademark, patent, logo, designs or any other IP to someone else or to a business. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work. If you assign IP rights to another business, you are transferring ownership of the IP. It is more common to licence intellectual property rights than to assign them in business. Licensing allows a third party to have rights over the IP and do certain acts with the IP that they would not otherwise have been able to do but you keep ownership of the IP. You can limit the licence to a certain area eg the UK, Middle East, Africa etc or to a certain period of time eg 1 year, 2 years etc. Risks If for example you assign your IP to a business and it fails, you would have lost your IP. If on the other hand you licence your IP to another business, you are in ultimate control and can stipulate how the IP should be used and when it has to be returned. You can also stipulate that the IP be returned to you if the business goes into liquidation or on the happening of certain events.



Copyright

What is it? Copyright is the exclusive right to use and reproduce in public any material you have created if it falls into one of the following categories: i) Written work such as books, plays film scripts, web content, articles, essays, professional opinions, tables, compilations and databases; ii)Artistic works such as paintings, drawings, photos, maps, charts, plan, diagrams etc; iii)sound recordings; iv)Films, music and broadcasts; or v) computer programs. Why is it important? Copyright arises automatically when you create the work so there is no need to register copyright to own a work that you have created. You should be wary of any person that asks you to pay them to register your copyright in a work that you have created as it will be a scam. Businesses as well as individuals can own copyright. Copyright usually lasts for 70 years. You can buy someone’s copyright via a document called a Deed of assignment or give them a licence to use your copyright. As a general rule if an employee creates a work in the course of their employment their employer (ie the business ) will own the work. However, if the work in question is not part of the agreed duties of the employee the employee will own the work. To ensure that copyright work created by employees is owned by the business you should include appropriate intellectual property clauses in your employment contracts. Risks If you commission a piece of work from a freelancer the copyright in the work will belong to the freelancer unless the parties have agreed otherwise. It is important to ensure that the position on ownership of the copyright in writing before work starts to ensure that the business owns the copyright in the work produced by the freelancer.



Buying & Selling a business

Share Purchase Agreement

What is it?

A Share purchase agreement (SPA) is an agreement setting out the terms and conditions relating to the sale and purchase of shares in a company. Share purchase agreements are often complex documents which can become lengthy and create significant delay, friction and cost if not dealt with by experienced, business minded lawyers.

Why is it important?

There is often a choice and negotiation over whether it’s best for either or both parties to buy/sell assets rather than shares. This would depend on whether the current owner (seller) is a limited company. If not, there can be no share sale! Further, where a buyer wants to preserve as many customer relations as possible, they may elect to buy the shares as opposed to assets.

The seller’s solicitor usually draws up the draft share purchase agreement.

Risks

While the buyer’s solicitor will try to protect the buyer the interest of the seller’s solicitor is to minimise this protection, in particular by limiting the seller’s liability for misrepresentation. However, in practice, where there is fraudulent misrepresentation the seller will still be liable so the buyer may accept such clauses since they are not valid if the seller can prove fraudulent misrepresentation.

Please contact us if you require specialist commercial lawyers to review, draft, negotiate, amend or generally advise on a share purchase agreement.



Asset Purchase Agreement

What is it?

An asset purchase agreement is an agreement setting out the terms and conditions relating to the sale and purchase of assets of a business. In an asset purchase, the company itself will be selling the assets, whilst in a share sale, the individual shareholders will be the sellers.

Occasionally a buyer will prefer to acquire certain assets of a business rather than acquire all of the shares in a company and therefore, both its assets and liabilities.

A buyer will normally prefer to buy the assets of a business, while the seller will prefer to sell the shares. The main benefit of an asset purchase is that a buyer may selectively pick the assets and liabilities they want to acquire and there is generally less risk of hidden liabilities than with a share purchase.

Risks

The main disadvantage of an asset sale, as opposed to a share purchase agreement is that each item must be transferred in accordance with its proper rules and made enforceable against third parties (eg through consents and approvals). This is especially the case for customer contracts, as a third party may view the transaction as an opportunity to renegotiate their contract thereby adding delay and additional costs to the transaction.

In addition, there may be other important contracts that are non-transferrable, or licences and consents unique to the seller which may not be transferrable.

In an asset sale it is vital to identify what exactly is being purchased. Assets transferred as part of an Asset purchase agreement may include:

  • Plant and machinery.
  • Premises;
  • Stock;
  • Contracts;
  • Know-how; and
  • Goodwill.

Please contact us if you require specialist commercial lawyers to review, draft, negotiate, amend or generally advise on a share purchase agreement.



Disclosure Letter

What is it?

A Non-Disclosure letter or Non-Disclosure Agreement, also called a Confidentiality Agreement, is a legal contract between two or more parties by which the parties agree not to disclose information (which is intended to be kept secret) that they have shared with each other during a business relationship to third parties.

Why is it important?

This Agreement may either be one-way (unilateral) or two-way (mutual), depending on whether both parties will be providing the secret information. If one party will be providing the secret information to the other, it is called a Unilateral Non-Disclosure Agreement.

For example, where an inventor of an idea is sharing the idea with another person, the inventor is the disclosing party and the other party is the receiving party. If the two parties will share the secret information between themselves, it is called a Mutual Non-Disclosure Agreement.

This Agreement can be used to share intellectual property, share commercial trading information or formalize a business relationship, for example, between an employer and an employee



Operating as a Sole Trader

Notice of breach of covenants

What is it?

This is popularly called a Section 146 Notice (it is a notice required to be served by section 146 of the Law of Property Act 1925 and relates solely to business tenants) that warns a tenant who is in breach of covenant (other than the covenant to pay rent) of the landlord’s intention to forfeit the lease on ground of the breach of covenant.

Why is it important?

“Forfeiture” is the right of the landlord to re-enter the commercial property and take back possession of the property if a covenant has been breached.

For the notice to be valid and binding the notice must specify the breach of covenant and if the breach is capable of remedy , require the tenant to remedy it and pay monetary compensation to the landlord for the breach.

A landlord can only serve such a notice if the lease contains a right to forfeit the lease (i.e. a right of re-entry). The notice must also contain certain prescribed information. If the tenant does not remedy the breach within a reasonable time the landlord can start forfeiture proceedings in the County Court.

Risks

A landlord who wants to forfeit the lease must avoid “waiving” the breach of covenant. Waiver occurs where a landlord becomes aware of a breach of the lease but does not take action against the tenant within a reasonable period or acknowledges the continuation of the lease by for example demanding rent or service charges or accepting rent payments from the tenant.



Break notice

What is it? A Break Notice, also known as a Break Clauses or a break option, is an important contractual provision in a lease which allows either a landlord or tenant to bring a Lease to an early end. Some landlords often have a vested interest in making life difficult for a tenant seeking to exercise its option to break the lease by making the option subject to stringent conditions. Why is it important?

Break Notices are akin to options and are therefore strictly construed by the courts . From the tenant’s perspective, a properly drafted Break Clause gives them the opportunity to avoid being tied into a lease that they can no longer afford. This is a safety-net for a tenant – especially if they are just starting out.

Understandably though, a landlord who is receiving a steady rental income may be reluctant to lose a tenant, particularly in tough economic times.

Risks

Any tenant seeking to exercise the option to break the lease must check the lease carefully and ensure they follow the landlord’s “break clause conditions” to the letter. It is crucial when taking a lease that a tenant understands that the conditions of the Break Clause can easily defeat an option to break unless followed to the letter. If the conditions are not strictly followed the termination is not valid and the tenant remains a lessee until the expiry of the lease, the next break clause date or until the tenant is able to assign the lease with the landlord’s consent if there is such a provision in the lease.

A properly advised tenant should refuse any condition, other than up-to date payment of principal rent and giving up occupation.



Tenant's agreement to exclude security of tenure

What is it?

The Landlord and Tenant Act 1954 provides tenants of business premises with rights of ‘security of tenure’. This means that once a business tenant’s lease expires, the tenant has the right to request a new lease on the same terms as the previous lease (subject to agreement on terms, such as the amount of rent, any legislative updates etc), except where the landlord has a statutory ground to refuse a new lease (for instance, if the tenant has failed to pay rent or the landlord wishes to redevelop the premises).

Why is it important?

When agreeing to enter into a commercial or business lease, one of the things that will be discussed when agreeing Heads of Terms is whether your lease will be ‘protected’ with security of tenure, or ‘contracted out’ i.e. excluded’ from security of tenure. It is quite common for landlords to require that security of tenure rights are excluded from a lease. They do this by asking the prospective tenant to sign a notice in front of an independent solicitor agreeing to the exclusion of security of tenure under the lease.

Risks

This notice means that a tenant of commercial premises will not have the automatic right to request a renewal of their lease at the end of the term of the lease, leaving the landlord free to let the property to another tenant at the end of the term. This is because landlords often wish to retain strict control over the occupation of their property. If security of tenure is excluded, you the tenant, must vacate the property at the end of the lease in accordance with its terms unless you have negotiated a new lease with the landlord separately.



Landlord's notice to exclude security of tenure



Section 25 Notice

What is it?

This is a notice by the landlord under s25 of the Landlord and Tenant Act 1954.

Why is it important?

It allows the landlord to start a procedure which will end either in the tenant being granted a new lease or in the tenant vacating. This notice cannot be given before the last year of the lease terms nor after the tenant has served a request for a new tenancy under s26 of the Act.

Risks

The s25 notice must state the date on which the landlord intends to bring the existing lease to an end.



Section 26 Notice

What is it?

This is a notice given by the tenant requesting a new tenancy upon the termination of the old tenancy.

Why is it important?

The s26 request must specify the date on which the existing lease is to end.

Risks

This notice cannot be served before the last year of the agreed lease term nor can it be served after the landlord has served a s25 notice.



Licence for alterations

What is it?

This is a licence from the landlord to the tenant giving the tenant the right to carry out specific works or alterations to the property that is being let. The alterations may be major or minor.

Why is it important?

The Licence should include provisions as to the manner in which the tenant will carry out the works, timescales, reinstatement and (to the extent applicable) the Construction (Design and Management) Regulations 2015. Drawings and specifications showing the proposed works should be attached to the Licence so that it is clear what the landlord is consenting to.

If the proposed alterations are not substantial (e.g. the erection of demountable partitioning or signage) you can use a simple Letter- Licence to Alter.



Section 27 Notice

What is it? A tenant has the right under s27 of the 1954 Act to bring the tenancy to an end by giving at least three months’ notice before the date on which the tenancy would otherwise expire. If the lease term has expired but the tenancy is still continuing under the 1954 Act the tenant may bring that continuing tenancy to an end by giving not less than three months’ notice in writing to the landlord.



Managing licenses

Running an online business

Protecting your IP

Business Relationships

Writing a business plan

Ending or Assigning an Existing Agreement

Trademark (UK, EU, US, China)

What is it? One of the best ways of protecting your business name, brand and logo from being copied is to register a trademark. A trademark is a distinctive sign eg name, brand, logo or tagline (or a combination of these) used by a business to distinguish its goods and or services from those sold by another business and to identify its business as the source of those goods and services. In the UK, trademarks are granted by the UK Intellectual Property Office (UK IPO) Registering a trademark increases the protection it receives and stops others from using it. You may be able to register a trademark over:

  • words (eg the trademark “Nandos”)
  • pictures and words (eg the Pure Business Law trademark).
  • slogans (eg the Lidl strap line “Big on quality, Lidl on price”)
  • colours (eg the Cadbury Dairy Milk purple as owned by Kraft ).
  • sounds (eg the Match of the Day theme song played when their logo appears at the beginning of football matches) and
  • Logos (eg the Mac OS logo);
  • 3D shapes (eg the Pepsi cola bottle shape)
Why is it important? Registering a name or a logo gives you the following three benefits: Allows you to object if someone else applies to register ay name or logo that is similar to your trademark for the same of similar goods or services. This protection does not cover an application to use the same name or branding for a different type of business. For instance if you register “Fast-Sports” for a trade mark for selling sports cars, no one could register “Fast-Spots” for anything to do with selling cars but they may be able to register it as a trade mark for a dry-cleaning business because that has nothing to do with cars. If another business tries to use the same or similar branding on similar goods or services thereby infringing your trademark you can take legal proceedings to stop them. Your business’s goodwill and reputation have commercial value so registering a trademark is an easy way to protect your hard work and creativity. Registering a trademark gives you the exclusive right to use it for 10 years, after which you must make an application to renew it to the Intellectual Property Office (IPO). Their website is at www.ipo.gov.uk. You can register your trademarks in the UK, the EU and or internationally. All registrations last for 10years and are renewable indefinitely in further 10-year periods. The most suitable registration for your brand will depend on where you do business eg UK, EU or internationally. Risks If you do not register your name, brand or logo as a trademark you will not be able to easily stop other people using your trademark and you may end up allowing other businesses to profit from your hard work.



Patent (Worldwide)

What is it? Protect your invention through a patent. A patent gives you an exclusive right over a novel invention that you have created. It gives you the exclusive right to use and reproduce your invention and stop people copying your invention without your permission. For instance, only Apple can make and sell Apple phones. In the UK, patents are granted by the UK Intellectual Property Office (UK IPO) To have a patent over something you have created, you must register it at the IPO. Patents generally last for up to twenty years. You can only patent a novel invention and cannot patent something that is already in the public domain. This means that your invention must be new (i.e. you cannot patent something which already exists eg a literary work, method of medical treatment, a diagnosis, scientific theory or a discovery) . You also cannot patent something which is already the subject of a patent application pre-dating your application. This means that you must carry out extensive market research examining trade journals and academic papers relevant to your industry market and searching for patents and patent applications on the patent registers worldwide. Obtaining a patent is expensive and time consuming. You should enlist the help of a professional eg lawyer or patent agent before starting an application for a patent. Why is it important?
Should I register my invention as a patent? Yes, you should if you believe that you have created a novel product or process which is so important to your business that you wish to pay a patent application fee to prevent others from using it. Risks Registering your invention as a patent ensures that:

  1. You can prevent others using your product or process if they intend to use it for commercial purposes.
  2. You can profit from your patent by only permitting certain people to use it for commercial purposes and only on condition that they pay you or give you a percentage of the profits they make from using your patent.
Risks If you do not register your invention as a patent, you will not be able to easily stop other people copying your ideas and you may end up allowing other businesses to profit from your hard work. You can use free online databases to search for patents eg Ipsum the UK IPO’s search facility, the Patents Journal (for UK applications that have been filed but not yet published), Espacenet – the European Patents Office’s (EPO’s) free database for worldwide patents including UK patents and Patentscope – the World Intellectual Property Organisation’s (WIPO’s ) free database for worldwide patents including UK patents. Note that these databases may not be up to date. As an alternative you may prefer to use professional search services such as:
  1. The PATLIB (patent library) centre
  2. A Patent attorney through the Chartered Institute of Patent Attorneys at www.cipa.org.uk



IP Assignment Agreement

What is it? An IP assignment agreement transfers rights and ownership in an IP created by one person to someone else or to a business. It can be used to transfer rights in a trademark, patent, logo, designs or any other IP. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work.



Registering Designs

What is it? Register your design to stop someone else from using it. A design right is a right that you have which can protect your original design from being copied by someone else.There are two different types of design rights – registered and unregistered design rights which can protect the look or appearance of a product from being copied. Why is it important? Design rights can exist in computer icons, logos, graphic designs, packaging and clothing. The rights do not arise by reference to the particular product but rather in the shape or look of either the whole of the product or part of that product. For instance, a registered design right in a motif used on a book will be infringed if someone else uses the same design motif on a duvet cover. In the UK, design registrations are granted by the UK Intellectual Property Office (UK IPO). Risks Even if you do not register your design, it will still be automatically protected as an unregistered design right. However this right is more limited right because it only protects you against unauthorised copying and does not prevent other people creating similar designs independently. For businesses in the UK these unregistered design rights arise automatically in the UK and the EU for some designs under both UK and EU law if the relevant criteria are met. In the UK, unregistered design rights arise as soon as the relevant designs are recorded in some way eg in a drawing and in the UK as soon as they are made available to the public. However, the protection granted differs slightly in each jurisdiction. For instance in the UK unregistered design rights will automatically protect either the shape or configuration of the whole or part of an article for up to 15 years, whereas in the EU unregistered design rights will automatically protect not only the appearance of the whole or part of any industrial or handicraft product resulting from its features but also its lines, shape, texture, contours and materials but only for up to 3 years. You should therefor keep a watching brief and consider whether such a right has arisen as soon as you believe that either you or your employees (in the course of their employment) have created an original design. Brexit The UK and the EU have agreed that there will be an implementation period (ie transition period) from the date the UK left the EU i.e. 31 January 2020 until 31 December 2020 or a later date if the transition period is extended. During this period there will be no changes to unregistered design rights. UK unregistered design rights UK unregistered design rights will continue after the transition period and provide up to 15 years of protection. However, after the transition period the UK Government has advised that only UK residents or businesses incorporated in the UK will be eligible for UK registered designs. EU unregistered design rights From the end of the transition period unregistered design rights in the EU (ie unregistered Community designs) will no longer be valid in the IK. The government has advised that it will immediately replace the unregistered Community design rights with UK unregistered design rights ( to be known as UK continuing unregistered design rights) and which will offer protection in the EU and UK for the rest of the three year terms previously attached to the unregistered Community design right. This means you will continue to be protected in the EU and UK for unregistered Community designs that existed before the end of the transition period. If you are concerned about how to protect your unregistered design rights in the UK and EU after the transition period please contact our IP lawyers for further advice on 01234 938089.



Non-Disclosure Agreement (NDA)/Letter of confidentiality

What is it? This agreement protects confidential information belonging to your business including IP and other information which you do not want to be made public. Why is it important? It is important to have an NDA in place before sharing any confidential or sensitive information in business meetings with people with whom you intend to do business eg investors, prospective co-founders, suppliers, consultants and the like. A letter of confidentiality is similar to a non-disclosure agreement. The party disclosing confidential information imposes restrictions as to the use of this confidential information to the party receiving it. Risks If you do not have the required safeguards in place to protect your intellectual property during business meetings or negotiations you may have your designs, inventions or work stolen or copied by the person with whom you are negotiating. This could be disastrous for your business.



one-way confidentiality agreement

What is it? A one-way Confidentiality agreement is similar to a non-disclosure agreement but imposes restrictions as to the use of this confidential information only on one party.



Assignment of intellectual property

What is it? An IP assignment agreement transfers rights and ownership in an IP created by one-person eg trademark, patent, logo, designs or any other IP to someone else or to a business. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work. If you assign IP rights to another business, you are transferring ownership of the IP. It is more common to licence intellectual property rights than to assign them in business. Licensing allows a third party to have rights over the IP and do certain acts with the IP that they would not otherwise have been able to do but you keep ownership of the IP. You can limit the licence to a certain area eg the UK, Middle East, Africa etc or to a certain period of time eg 1 year, 2 years etc. Risks If for example you assign your IP to a business and it fails, you would have lost your IP. If on the other hand you licence your IP to another business, you are in ultimate control and can stipulate how the IP should be used and when it has to be returned. You can also stipulate that the IP be returned to you if the business goes into liquidation or on the happening of certain events.



Copyright

What is it? Copyright is the exclusive right to use and reproduce in public any material you have created if it falls into one of the following categories: i) Written work such as books, plays film scripts, web content, articles, essays, professional opinions, tables, compilations and databases; ii)Artistic works such as paintings, drawings, photos, maps, charts, plan, diagrams etc; iii)sound recordings; iv)Films, music and broadcasts; or v) computer programs. Why is it important? Copyright arises automatically when you create the work so there is no need to register copyright to own a work that you have created. You should be wary of any person that asks you to pay them to register your copyright in a work that you have created as it will be a scam. Businesses as well as individuals can own copyright. Copyright usually lasts for 70 years. You can buy someone’s copyright via a document called a Deed of assignment or give them a licence to use your copyright. As a general rule if an employee creates a work in the course of their employment their employer (ie the business ) will own the work. However, if the work in question is not part of the agreed duties of the employee the employee will own the work. To ensure that copyright work created by employees is owned by the business you should include appropriate intellectual property clauses in your employment contracts. Risks If you commission a piece of work from a freelancer the copyright in the work will belong to the freelancer unless the parties have agreed otherwise. It is important to ensure that the position on ownership of the copyright in writing before work starts to ensure that the business owns the copyright in the work produced by the freelancer.



Health & Safety

Software Development Agreement

What is it? Software is intellectual property. A software development agreement is an agreement between a business or an individual and a developer by which the individual or business hires the developer to create and deliver a specific piece of software. Why is it important? This agreement is important as it clarifies the relationship between the developer and the hirer or employer. Risks When you engage a software developer if you want the software created to belong to your company or to you, you must ensure that you agree and insert an ownership clause in the agreement. If there is no ownership clause the software created by the developer will automatically belong to the developer even if your company has spent millions of pounds developing the software.



Freelancer Agreement

What is it? You may use a self-employed freelancer to do a specific task eg work on a project, design your website or do your marketing for a specific period.The standard contract used to hire a freelancer is a consultancy agreement. This agreement clarifies the basic terms of your relationship with the freelancer eg the work to be done, fees payable and other terms of the agreement eg a non-solicitation clause, confidentiality clause, data protection, ownership of any intellectual property created by the freelancer, indemnification clause for any losses you incur due to the freelancer’s breaches of third party intellectual property. Etc. A company consultancy agreement is used to hire a freelancer who operates through their own limited company. An individual consultancy agreement is used to hire a freelancer directly. Why is it important? More specialist freelancers may want you to sign up to their own bespoke terms and conditions when you instruct them. If that is the case you must ensure that you check all the clauses carefully to ensure that they do not conflict with your requirements and that you are happy with the terms eg consultant to be liable for breaches of your Intellectual property and third party intellectual property, confidentiality, fee payable, data protection, indemnification clause etc. Risks You should also ensure that you are aware of the IR35 tax rules. If a freelancer is providing services to you through a company your arrangement may be subject to the IR35 tax rules. This means that the freelancer may have to pay tax and national insurance as if they were employed by you. HMRC has a useful tool at www.gov.uk to enable businesses check employment status for tax purposes. From April 2020 if you are a medium or large business the responsibility for determining whether the IR35 tax rules applies to the consultancy and for payment of the income tax and national insurance on behalf of the freelancer lies with the company to whom the freelancer provides the services. If you are a “small business” (i.e. a business which satisfies two or more of the following requirements – i) a turnover of £10.2 million or less, ii) no more than 50 staff and iii) a balance sheet f no more than £5.1million the responsibility for determining whether the IR35 tax rules apply and for payment of the tax and national insurance lies with the freelancer.



Internship Agreement

What is it? An intern may be a volunteer, a worker or an employee. An internship agreement is an agreement between an intern and an employer where the intern agrees to provide their services in exchange for training provided by the employer or business with no expectation that the internship will result in employment with the business. Why is it important? If your intern will just be shadowing staff and will be unpaid you won’t need a contract but it is good practice to send your intern a letter confirming the agreement terms. If you want your intern to work for your business rather than just shadow staff your intern will either be an employee or a casual worker. Risks You must have a proper contract for their status and treat them accordingly. If your intern is an employee or a casual work you must pay them the national minimum wage(NMW). If you do not pay them the NMW you are at risk of HMRC prosecuting you or the intern suing you in court.



Staff Handbook

What is it? A Staff handbook is an important living document for your employees that sets out your company’s operational policies, values and culture for current and future employees. There is no legal obligation to have a staff handbook, however as there are certain policies that you must give your employees by law (eg disciplinary and grievance policies and health and safety policies) it is best practice to start a handbook when you hire your first employee as it sets expectations for what behaviour is acceptable and desirable across your business and can protect you legally. Why is it important? A staff handbook can be contractual or non-contractual(i.e. binding or non-binding). It is best practice to make it non-contractual so that you can change it at your discretion without having to consult staff. Make sure you keep your handbook updated to reflect the law and ensure that the issue date is clearly shown on the handbook. Risks If you do not have a staff handbook and you are in dispute or engaged in legal proceedings with an employee it will be more difficult to verify your policies and procedures.



Job description

What is it? A job description sets out the scope of the role (i.e. duties and responsibilities), any skills, experience and qualifications required, the ethos and culture of your business, salary and other staff benefits. It is important as it helps you clarify what you are looking for and will also help candidates determine whether they have the skills and experience for the role. Why is it important? Always review your job description before every recruitment exercise to ensure it accurately describes the job in question. Failing to do so may dissuade suitable candidates from applying or encourage unsuitable candidates to apply. Risks It is essential that you avoid using discriminatory words in your job description eg “bright, energetic, young man” or “ an Italian” person when you actually require someone who speaks Italian as these would indicate a preference based on gender, disability, age and ethnicity.



Job offer letter

What is it? You should always confirm a job offer in writing and ask the candidate to confirm their acceptance of the offer. Why is it important? A job offer letter is a letter offering employment after an interview and summarising the basic terms of employment (if you are providing the employment contract with the offer letter) or summarising the main employment terms (if you will not be providing the employment contract until a later date) Risks Always ensure that the offer letter specifies the conditions to which the offer is subject eg “subject to satisfactory references” and that you retain a signed copy of the offer letter and contract in the staff member’s personnel records.



Non-executive director letter of appointment

What is it? This is a formal letter appointing a person as a non-executive director of a company. It sets out the key terms of the appointment and the director’s duties and responsibilities. Why is it important? As a director is more likely to be exposed to confidential information and have more responsibility this contract will include clauses which help to protect the business’s interests eg garden leave, confidentiality, non-solicitation clauses and restrictive covenants.



Senior employment contract

What is it? This is a more complex contract of employment between a senior employee or director/executive and an employer . It sets out the employment terms and conditions of employment and the standard areas of the employment. Why is it important? As a senior executive is more likely to be exposed to confidential information and have more responsibility this contract will include clauses which help to protect the business’s interests eg garden leave, confidentiality, non-solicitation clauses and restrictive covenants and ensure any intellectual property created by the employee belongs to the business.



Zero hours contract

What is it? This is a casual agreement between an individual and a business where the worker works “as and when” the employer needs the labour. There is no guarantee of any set hours and the worker is not obliged to work the hours offered. Why is it important? A zero-hours contract should be used where the business simply wishes to hire a worker on a casual basis and would benefit from not having to give the worker a guaranteed number of hours and days of work. This contract is useful for seasonal work or special events eg in the agriculture business, hospitality and catering business; when a business is entering a new market and is unsure of how many staff members it will need; in cases of unexpected absence from work eg to provide cover where there is sudden sickness or absence from work etc. They are often used in the healthcare, agriculture, hotels, restaurants and education sectors. In the UK workers operating under zero-hours contracts are entitled to rest breaks, annual leave, sick pay and protection from discrimination and must be paid the national minimum wage for hours worked. Risks Zero-hours contracts are controversial due to the uncertainty of the work and the fact there is no guaranteed employment. They do however serve a purpose by providing a flexible labour market and a route into more permanent employment. You should ensure that your zero-hours contract clearly sets out your employee’s employee status, rights and obligations.



Consultancy agreement

What is it? A consultancy agreement is a contract between a self-employed person (Consultant) and a customer requiring the consultant’s services.It is similar to the standard contract used to hire a freelancer. Why is it important? This agreement clarifies the basic terms of your relationship with the freelancer eg the work to be done, fees payable and other terms of the agreement eg a non-solicitation clause, confidentiality clause, data protection, ownership of any intellectual property created by the freelancer, indemnification clause for any losses you incur due to the freelancer’s breaches of third party intellectual property. Etc. More specialist freelancers may want you to sign up to their own bespoke terms and conditions when you instruct them. If that is the case you must ensure that you check all the clauses carefully to ensure that they do not conflict with your requirements and that you are happy with the terms eg consultant to be liable for breaches of your Intellectual property and third party intellectual property, confidentiality, fee payable, data protection, indemnification clause etc. Risks You should also ensure that you are aware of the IR35 tax rules. If a freelancer is providing services to you through a company your arrangement may be subject to the IR35 tax rules. This means that the freelancer may have to pay tax and national insurance as if they were employed by you. HMRC has a useful tool at www.gov.uk to enable businesses check employment status for tax purposes. From April 2020 if you are a medium or large business the responsibility for determining whether the IR35 tax rules applies to the consultancy and for payment of the income tax and national insurance on behalf of the freelancer lies with the company to whom the freelancer provides the services. If you are a “small business” (i.e. a business which satisfies two or more of the following requirements – i) a turnover of £10.2 million or less, ii) no more than 50 staff and iii) a balance sheet f no more than £5.1million the responsibility for determining whether the IR35 tax rules apply and for payment of the tax and national insurance lies with the freelancer.



Employment contract

What is it? An employment contract is an agreement between the employer and employee setting out the rights and duties of the employer and employee. An employment agreement is vital as it forms the legal relationship between the employer and the employee. Why is it important? If you have employees, you are legally obliged to provide them with a written statement of their basic terms of employment in writing no later than two months after they start work. From 6 April 2020 this obligation will extend to casual workers and all new employees must be provided with this written statement and additional information on or before the staff member’s first day of work. Risks If things go wrong an employment agreement will clarify the legal relationship between the employer and employee and will help the court or tribunal in providing a solution in the event of a dispute between the employer and employee. Think of an employment contract as your passport to nurturing good employment relations with your staff and running a good, progressive business. If your employee will be part-time do note that part-time staff and fixed term staff (temporary employees) must be treated equally with full-time staff. This means that a part-time or temporary employee on the same role must get the same pay or benefits as a comparable full-time member of staff pro-rated for the length of time they will be with you. Comparable employees are those doing the same or broadly similar work at the same place of work or at a different location.



Change to employment terms letter

What is it?

As an employer sometimes you may have business reasons that means you need to change your employees terms and conditions of employment (eg basic rate, overtime, bonus, working location, duties and responsibilities, hours/days of work, holiday or sick pay entitlement). This is called a “variation” of the contracts of employment.

Why is it important?

You can only do this if (a) you have a provision in the contract that allows the change. This clause is usually called a “flexibility clause” and may be in your contract or Company Handbook. (b) the employees agree the change or (c) the employees representative eg a Trade Union agrees the change.

Risks

You must have sound business reasons for making any change and follow a fair consultation procedure with your employees before you introduce the changes. If the employees do not agree the change and you believe that it is a reasonable change you can force a new contract on your employees. However, this should be used only as a last resort as it could lead to an employee raising a grievance and ultimately a claim to an Employment Tribunal. Once the change has been agreed you should ensure that each employee signs the new contract to confirm the employee has accepted the change and that you keep a copy.

Please contact our employment solicitors if you are thinking of making a change to your employment contracts.



Working time directive opt out letter

What is it? The Working Time Directive prevents employees from being forced to work more than 48 hours per week unless they freely agree to opt out of the directive. To opt out of the 48 hours limit your employees can sign an “Opt-out of the Working Time Directive Agreement”. Why is it important? This is an agreement between an employer and a worker or employee for the purposes of the Working Time Regulations 1998 whereby the employee or worker agrees to opt-out of the maximum weekly working time limit of 48 hours for a period or indefinitely. Such agreements are usually signed by doctors, police officers a, long-haulage truck drivers and others whose jobs necessitate long working hours. Risks You cannot sack or treat your employee unfairly if they refused to opt out.



Probation letter

What is it? A probation letter is a letter by which an employer informs an employee that their probation period has finished and tells them the outcome of the probation. The outcome may be threefold: (a) that the employee has successfully completed their probationary period and their employment will continue OR (b) the employee’s probation will be extended as the employee’s performance needs to improve OR (c) the employee’s employment is being terminated as the employee has not met the company’s performance requirements. Our employment solicitors can provided you with a suite of sample employment probation letters to use as a guide. Employers should adapt the content to suit their requirements and or contact us for further advice if required.



Flexible working request

What is it? An employee can make a “flexible working request” to their employer if they want to work part-time instead of full-time, change their start and finishing times, work compressed hours(i.e. do their standard hours over fewer days), job-share or do “flexi-time”. Flexitime is where an employee is granted permission to be flexible with their start and finish times. Why is it important? The law provides that an employee has the right to make a flexible working request if (a) the employee has worked for their employer for at least 26 weeks (b) the member of staff is legally classed as an employee and (c) the employee has not made any other flexible working request in the last 12 months. By law, if the employee has the right to make the request the employer is obliged to look at the request fairly in accordance with the Acas Code of Practice on flexible working requests and, make a decision within 3 months.



Grievance letter

What is it?

A grievance is a concern, problem or complaint raised by an employee in the workplace about their work, their manager, other staff member or the workplace. It could be about the employee’s pay and benefits, work conditions, workload, bullying or harassment. There is no legally binding process that an employer must follow when handling a grievance at work. However, it is best practice as an employer to have a grievance procedure.

Why is it important?

A grievance procedure is one of the ways to resolve a problem at work. This procedure can be set out in the employment contract, company handbook, HR intranet site or in your Human Resources manual.

Risks

If you do not have a grievance procedure you should ensure that you follow the Acas Code of Practice on Disciplinary and Grievance procedures if an employee comes to you with a grievance.

When an employee raises a workplace grievance you must take them seriously. Whether or not the grievance is valid you must investigate the grievance as it could be having a negative effect on the staff concerned and may lead to disgruntled staff and loss of valuable staff. Having an informal chat when an employee comes to you with an issue may be all that is needed. If the chat does not resolve the problem, you must investigate the problem .An employee should not be dismissed or treated unfairly for raising a genuine grievance.

An employee who is disadvantaged or dismissed for raising a grievance can raise a claim in the Employment Tribunal for unfair dismissal or automatic unfair dismissal. An employee would usually be expected to lodge a grievance before claiming constructive dismissal otherwise any damages awarded the employee at the Employment Tribunal could be reduced.

Avoid grievances in your workplace by contacting Pure Business law, your expert employment lawyers.



Managing licenses

Running an online business

Protecting your IP

Business Relationships

Writing a business plan

 
 
 
 

Planning & Highways

Trademark (UK, EU, US, China)

What is it? One of the best ways of protecting your business name, brand and logo from being copied is to register a trademark. A trademark is a distinctive sign eg name, brand, logo or tagline (or a combination of these) used by a business to distinguish its goods and or services from those sold by another business and to identify its business as the source of those goods and services. In the UK, trademarks are granted by the UK Intellectual Property Office (UK IPO) Registering a trademark increases the protection it receives and stops others from using it. You may be able to register a trademark over:

  • words (eg the trademark “Nandos”)
  • pictures and words (eg the Pure Business Law trademark).
  • slogans (eg the Lidl strap line “Big on quality, Lidl on price”)
  • colours (eg the Cadbury Dairy Milk purple as owned by Kraft ).
  • sounds (eg the Match of the Day theme song played when their logo appears at the beginning of football matches) and
  • Logos (eg the Mac OS logo);
  • 3D shapes (eg the Pepsi cola bottle shape)
Why is it important? Registering a name or a logo gives you the following three benefits: Allows you to object if someone else applies to register ay name or logo that is similar to your trademark for the same of similar goods or services. This protection does not cover an application to use the same name or branding for a different type of business. For instance if you register “Fast-Sports” for a trade mark for selling sports cars, no one could register “Fast-Spots” for anything to do with selling cars but they may be able to register it as a trade mark for a dry-cleaning business because that has nothing to do with cars. If another business tries to use the same or similar branding on similar goods or services thereby infringing your trademark you can take legal proceedings to stop them. Your business’s goodwill and reputation have commercial value so registering a trademark is an easy way to protect your hard work and creativity. Registering a trademark gives you the exclusive right to use it for 10 years, after which you must make an application to renew it to the Intellectual Property Office (IPO). Their website is at www.ipo.gov.uk. You can register your trademarks in the UK, the EU and or internationally. All registrations last for 10years and are renewable indefinitely in further 10-year periods. The most suitable registration for your brand will depend on where you do business eg UK, EU or internationally. Risks If you do not register your name, brand or logo as a trademark you will not be able to easily stop other people using your trademark and you may end up allowing other businesses to profit from your hard work.



Patent (Worldwide)

What is it? Protect your invention through a patent. A patent gives you an exclusive right over a novel invention that you have created. It gives you the exclusive right to use and reproduce your invention and stop people copying your invention without your permission. For instance, only Apple can make and sell Apple phones. In the UK, patents are granted by the UK Intellectual Property Office (UK IPO) To have a patent over something you have created, you must register it at the IPO. Patents generally last for up to twenty years. You can only patent a novel invention and cannot patent something that is already in the public domain. This means that your invention must be new (i.e. you cannot patent something which already exists eg a literary work, method of medical treatment, a diagnosis, scientific theory or a discovery) . You also cannot patent something which is already the subject of a patent application pre-dating your application. This means that you must carry out extensive market research examining trade journals and academic papers relevant to your industry market and searching for patents and patent applications on the patent registers worldwide. Obtaining a patent is expensive and time consuming. You should enlist the help of a professional eg lawyer or patent agent before starting an application for a patent. Why is it important?
Should I register my invention as a patent? Yes, you should if you believe that you have created a novel product or process which is so important to your business that you wish to pay a patent application fee to prevent others from using it. Risks Registering your invention as a patent ensures that:

  1. You can prevent others using your product or process if they intend to use it for commercial purposes.
  2. You can profit from your patent by only permitting certain people to use it for commercial purposes and only on condition that they pay you or give you a percentage of the profits they make from using your patent.
Risks If you do not register your invention as a patent, you will not be able to easily stop other people copying your ideas and you may end up allowing other businesses to profit from your hard work. You can use free online databases to search for patents eg Ipsum the UK IPO’s search facility, the Patents Journal (for UK applications that have been filed but not yet published), Espacenet – the European Patents Office’s (EPO’s) free database for worldwide patents including UK patents and Patentscope – the World Intellectual Property Organisation’s (WIPO’s ) free database for worldwide patents including UK patents. Note that these databases may not be up to date. As an alternative you may prefer to use professional search services such as:
  1. The PATLIB (patent library) centre
  2. A Patent attorney through the Chartered Institute of Patent Attorneys at www.cipa.org.uk



IP Assignment Agreement

What is it? An IP assignment agreement transfers rights and ownership in an IP created by one person to someone else or to a business. It can be used to transfer rights in a trademark, patent, logo, designs or any other IP. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work.



Registering Designs

What is it? Register your design to stop someone else from using it. A design right is a right that you have which can protect your original design from being copied by someone else.There are two different types of design rights – registered and unregistered design rights which can protect the look or appearance of a product from being copied. Why is it important? Design rights can exist in computer icons, logos, graphic designs, packaging and clothing. The rights do not arise by reference to the particular product but rather in the shape or look of either the whole of the product or part of that product. For instance, a registered design right in a motif used on a book will be infringed if someone else uses the same design motif on a duvet cover. In the UK, design registrations are granted by the UK Intellectual Property Office (UK IPO). Risks Even if you do not register your design, it will still be automatically protected as an unregistered design right. However this right is more limited right because it only protects you against unauthorised copying and does not prevent other people creating similar designs independently. For businesses in the UK these unregistered design rights arise automatically in the UK and the EU for some designs under both UK and EU law if the relevant criteria are met. In the UK, unregistered design rights arise as soon as the relevant designs are recorded in some way eg in a drawing and in the UK as soon as they are made available to the public. However, the protection granted differs slightly in each jurisdiction. For instance in the UK unregistered design rights will automatically protect either the shape or configuration of the whole or part of an article for up to 15 years, whereas in the EU unregistered design rights will automatically protect not only the appearance of the whole or part of any industrial or handicraft product resulting from its features but also its lines, shape, texture, contours and materials but only for up to 3 years. You should therefor keep a watching brief and consider whether such a right has arisen as soon as you believe that either you or your employees (in the course of their employment) have created an original design. Brexit The UK and the EU have agreed that there will be an implementation period (ie transition period) from the date the UK left the EU i.e. 31 January 2020 until 31 December 2020 or a later date if the transition period is extended. During this period there will be no changes to unregistered design rights. UK unregistered design rights UK unregistered design rights will continue after the transition period and provide up to 15 years of protection. However, after the transition period the UK Government has advised that only UK residents or businesses incorporated in the UK will be eligible for UK registered designs. EU unregistered design rights From the end of the transition period unregistered design rights in the EU (ie unregistered Community designs) will no longer be valid in the IK. The government has advised that it will immediately replace the unregistered Community design rights with UK unregistered design rights ( to be known as UK continuing unregistered design rights) and which will offer protection in the EU and UK for the rest of the three year terms previously attached to the unregistered Community design right. This means you will continue to be protected in the EU and UK for unregistered Community designs that existed before the end of the transition period. If you are concerned about how to protect your unregistered design rights in the UK and EU after the transition period please contact our IP lawyers for further advice on 01234 938089.



Non-Disclosure Agreement (NDA)/Letter of confidentiality

What is it? This agreement protects confidential information belonging to your business including IP and other information which you do not want to be made public. Why is it important? It is important to have an NDA in place before sharing any confidential or sensitive information in business meetings with people with whom you intend to do business eg investors, prospective co-founders, suppliers, consultants and the like. A letter of confidentiality is similar to a non-disclosure agreement. The party disclosing confidential information imposes restrictions as to the use of this confidential information to the party receiving it. Risks If you do not have the required safeguards in place to protect your intellectual property during business meetings or negotiations you may have your designs, inventions or work stolen or copied by the person with whom you are negotiating. This could be disastrous for your business.



one-way confidentiality agreement

What is it? A one-way Confidentiality agreement is similar to a non-disclosure agreement but imposes restrictions as to the use of this confidential information only on one party.



Assignment of intellectual property

What is it? An IP assignment agreement transfers rights and ownership in an IP created by one-person eg trademark, patent, logo, designs or any other IP to someone else or to a business. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work. If you assign IP rights to another business, you are transferring ownership of the IP. It is more common to licence intellectual property rights than to assign them in business. Licensing allows a third party to have rights over the IP and do certain acts with the IP that they would not otherwise have been able to do but you keep ownership of the IP. You can limit the licence to a certain area eg the UK, Middle East, Africa etc or to a certain period of time eg 1 year, 2 years etc. Risks If for example you assign your IP to a business and it fails, you would have lost your IP. If on the other hand you licence your IP to another business, you are in ultimate control and can stipulate how the IP should be used and when it has to be returned. You can also stipulate that the IP be returned to you if the business goes into liquidation or on the happening of certain events.



Copyright

What is it? Copyright is the exclusive right to use and reproduce in public any material you have created if it falls into one of the following categories: i) Written work such as books, plays film scripts, web content, articles, essays, professional opinions, tables, compilations and databases; ii)Artistic works such as paintings, drawings, photos, maps, charts, plan, diagrams etc; iii)sound recordings; iv)Films, music and broadcasts; or v) computer programs. Why is it important? Copyright arises automatically when you create the work so there is no need to register copyright to own a work that you have created. You should be wary of any person that asks you to pay them to register your copyright in a work that you have created as it will be a scam. Businesses as well as individuals can own copyright. Copyright usually lasts for 70 years. You can buy someone’s copyright via a document called a Deed of assignment or give them a licence to use your copyright. As a general rule if an employee creates a work in the course of their employment their employer (ie the business ) will own the work. However, if the work in question is not part of the agreed duties of the employee the employee will own the work. To ensure that copyright work created by employees is owned by the business you should include appropriate intellectual property clauses in your employment contracts. Risks If you commission a piece of work from a freelancer the copyright in the work will belong to the freelancer unless the parties have agreed otherwise. It is important to ensure that the position on ownership of the copyright in writing before work starts to ensure that the business owns the copyright in the work produced by the freelancer.



 

Managing employee performance

Trademark (UK, EU, US, China)

What is it? One of the best ways of protecting your business name, brand and logo from being copied is to register a trademark. A trademark is a distinctive sign eg name, brand, logo or tagline (or a combination of these) used by a business to distinguish its goods and or services from those sold by another business and to identify its business as the source of those goods and services. In the UK, trademarks are granted by the UK Intellectual Property Office (UK IPO) Registering a trademark increases the protection it receives and stops others from using it. You may be able to register a trademark over:

  • words (eg the trademark “Nandos”)
  • pictures and words (eg the Pure Business Law trademark).
  • slogans (eg the Lidl strap line “Big on quality, Lidl on price”)
  • colours (eg the Cadbury Dairy Milk purple as owned by Kraft ).
  • sounds (eg the Match of the Day theme song played when their logo appears at the beginning of football matches) and
  • Logos (eg the Mac OS logo);
  • 3D shapes (eg the Pepsi cola bottle shape)
Why is it important? Registering a name or a logo gives you the following three benefits: Allows you to object if someone else applies to register ay name or logo that is similar to your trademark for the same of similar goods or services. This protection does not cover an application to use the same name or branding for a different type of business. For instance if you register “Fast-Sports” for a trade mark for selling sports cars, no one could register “Fast-Spots” for anything to do with selling cars but they may be able to register it as a trade mark for a dry-cleaning business because that has nothing to do with cars. If another business tries to use the same or similar branding on similar goods or services thereby infringing your trademark you can take legal proceedings to stop them. Your business’s goodwill and reputation have commercial value so registering a trademark is an easy way to protect your hard work and creativity. Registering a trademark gives you the exclusive right to use it for 10 years, after which you must make an application to renew it to the Intellectual Property Office (IPO). Their website is at www.ipo.gov.uk. You can register your trademarks in the UK, the EU and or internationally. All registrations last for 10years and are renewable indefinitely in further 10-year periods. The most suitable registration for your brand will depend on where you do business eg UK, EU or internationally. Risks If you do not register your name, brand or logo as a trademark you will not be able to easily stop other people using your trademark and you may end up allowing other businesses to profit from your hard work.



Patent (Worldwide)

What is it? Protect your invention through a patent. A patent gives you an exclusive right over a novel invention that you have created. It gives you the exclusive right to use and reproduce your invention and stop people copying your invention without your permission. For instance, only Apple can make and sell Apple phones. In the UK, patents are granted by the UK Intellectual Property Office (UK IPO) To have a patent over something you have created, you must register it at the IPO. Patents generally last for up to twenty years. You can only patent a novel invention and cannot patent something that is already in the public domain. This means that your invention must be new (i.e. you cannot patent something which already exists eg a literary work, method of medical treatment, a diagnosis, scientific theory or a discovery) . You also cannot patent something which is already the subject of a patent application pre-dating your application. This means that you must carry out extensive market research examining trade journals and academic papers relevant to your industry market and searching for patents and patent applications on the patent registers worldwide. Obtaining a patent is expensive and time consuming. You should enlist the help of a professional eg lawyer or patent agent before starting an application for a patent. Why is it important?
Should I register my invention as a patent? Yes, you should if you believe that you have created a novel product or process which is so important to your business that you wish to pay a patent application fee to prevent others from using it. Risks Registering your invention as a patent ensures that:

  1. You can prevent others using your product or process if they intend to use it for commercial purposes.
  2. You can profit from your patent by only permitting certain people to use it for commercial purposes and only on condition that they pay you or give you a percentage of the profits they make from using your patent.
Risks If you do not register your invention as a patent, you will not be able to easily stop other people copying your ideas and you may end up allowing other businesses to profit from your hard work. You can use free online databases to search for patents eg Ipsum the UK IPO’s search facility, the Patents Journal (for UK applications that have been filed but not yet published), Espacenet – the European Patents Office’s (EPO’s) free database for worldwide patents including UK patents and Patentscope – the World Intellectual Property Organisation’s (WIPO’s ) free database for worldwide patents including UK patents. Note that these databases may not be up to date. As an alternative you may prefer to use professional search services such as:
  1. The PATLIB (patent library) centre
  2. A Patent attorney through the Chartered Institute of Patent Attorneys at www.cipa.org.uk



IP Assignment Agreement

What is it? An IP assignment agreement transfers rights and ownership in an IP created by one person to someone else or to a business. It can be used to transfer rights in a trademark, patent, logo, designs or any other IP. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work.



Registering Designs

What is it? Register your design to stop someone else from using it. A design right is a right that you have which can protect your original design from being copied by someone else.There are two different types of design rights – registered and unregistered design rights which can protect the look or appearance of a product from being copied. Why is it important? Design rights can exist in computer icons, logos, graphic designs, packaging and clothing. The rights do not arise by reference to the particular product but rather in the shape or look of either the whole of the product or part of that product. For instance, a registered design right in a motif used on a book will be infringed if someone else uses the same design motif on a duvet cover. In the UK, design registrations are granted by the UK Intellectual Property Office (UK IPO). Risks Even if you do not register your design, it will still be automatically protected as an unregistered design right. However this right is more limited right because it only protects you against unauthorised copying and does not prevent other people creating similar designs independently. For businesses in the UK these unregistered design rights arise automatically in the UK and the EU for some designs under both UK and EU law if the relevant criteria are met. In the UK, unregistered design rights arise as soon as the relevant designs are recorded in some way eg in a drawing and in the UK as soon as they are made available to the public. However, the protection granted differs slightly in each jurisdiction. For instance in the UK unregistered design rights will automatically protect either the shape or configuration of the whole or part of an article for up to 15 years, whereas in the EU unregistered design rights will automatically protect not only the appearance of the whole or part of any industrial or handicraft product resulting from its features but also its lines, shape, texture, contours and materials but only for up to 3 years. You should therefor keep a watching brief and consider whether such a right has arisen as soon as you believe that either you or your employees (in the course of their employment) have created an original design. Brexit The UK and the EU have agreed that there will be an implementation period (ie transition period) from the date the UK left the EU i.e. 31 January 2020 until 31 December 2020 or a later date if the transition period is extended. During this period there will be no changes to unregistered design rights. UK unregistered design rights UK unregistered design rights will continue after the transition period and provide up to 15 years of protection. However, after the transition period the UK Government has advised that only UK residents or businesses incorporated in the UK will be eligible for UK registered designs. EU unregistered design rights From the end of the transition period unregistered design rights in the EU (ie unregistered Community designs) will no longer be valid in the IK. The government has advised that it will immediately replace the unregistered Community design rights with UK unregistered design rights ( to be known as UK continuing unregistered design rights) and which will offer protection in the EU and UK for the rest of the three year terms previously attached to the unregistered Community design right. This means you will continue to be protected in the EU and UK for unregistered Community designs that existed before the end of the transition period. If you are concerned about how to protect your unregistered design rights in the UK and EU after the transition period please contact our IP lawyers for further advice on 01234 938089.



Non-Disclosure Agreement (NDA)/Letter of confidentiality

What is it? This agreement protects confidential information belonging to your business including IP and other information which you do not want to be made public. Why is it important? It is important to have an NDA in place before sharing any confidential or sensitive information in business meetings with people with whom you intend to do business eg investors, prospective co-founders, suppliers, consultants and the like. A letter of confidentiality is similar to a non-disclosure agreement. The party disclosing confidential information imposes restrictions as to the use of this confidential information to the party receiving it. Risks If you do not have the required safeguards in place to protect your intellectual property during business meetings or negotiations you may have your designs, inventions or work stolen or copied by the person with whom you are negotiating. This could be disastrous for your business.



one-way confidentiality agreement

What is it? A one-way Confidentiality agreement is similar to a non-disclosure agreement but imposes restrictions as to the use of this confidential information only on one party.



Assignment of intellectual property

What is it? An IP assignment agreement transfers rights and ownership in an IP created by one-person eg trademark, patent, logo, designs or any other IP to someone else or to a business. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work. If you assign IP rights to another business, you are transferring ownership of the IP. It is more common to licence intellectual property rights than to assign them in business. Licensing allows a third party to have rights over the IP and do certain acts with the IP that they would not otherwise have been able to do but you keep ownership of the IP. You can limit the licence to a certain area eg the UK, Middle East, Africa etc or to a certain period of time eg 1 year, 2 years etc. Risks If for example you assign your IP to a business and it fails, you would have lost your IP. If on the other hand you licence your IP to another business, you are in ultimate control and can stipulate how the IP should be used and when it has to be returned. You can also stipulate that the IP be returned to you if the business goes into liquidation or on the happening of certain events.



Copyright

What is it? Copyright is the exclusive right to use and reproduce in public any material you have created if it falls into one of the following categories: i) Written work such as books, plays film scripts, web content, articles, essays, professional opinions, tables, compilations and databases; ii)Artistic works such as paintings, drawings, photos, maps, charts, plan, diagrams etc; iii)sound recordings; iv)Films, music and broadcasts; or v) computer programs. Why is it important? Copyright arises automatically when you create the work so there is no need to register copyright to own a work that you have created. You should be wary of any person that asks you to pay them to register your copyright in a work that you have created as it will be a scam. Businesses as well as individuals can own copyright. Copyright usually lasts for 70 years. You can buy someone’s copyright via a document called a Deed of assignment or give them a licence to use your copyright. As a general rule if an employee creates a work in the course of their employment their employer (ie the business ) will own the work. However, if the work in question is not part of the agreed duties of the employee the employee will own the work. To ensure that copyright work created by employees is owned by the business you should include appropriate intellectual property clauses in your employment contracts. Risks If you commission a piece of work from a freelancer the copyright in the work will belong to the freelancer unless the parties have agreed otherwise. It is important to ensure that the position on ownership of the copyright in writing before work starts to ensure that the business owns the copyright in the work produced by the freelancer.



Reorganisation & Redundancies

Joint Venture Agreement

What is it? This agreement is needed when two or more parties decide to engage in a business collaboration to deal with a particular project. There are two main types of joint ventures: i) A contractual joint venture is a contract between two parties who are looking to work together on a commercial project and pool their resources but do not want to create a separate legal entity such as a joint venture company or an LLP.(eg two businesses collaborating to bid for a contract or carry out research and development) . The collaboration will be generally be short term or for a defined period and will be of restricted scope with a well-defined purpose. ii)A corporate joint venture is a contract between two parties looking to work together on a commercial project where they will both set up a separate company (“a joint venture company”) separate from their current operations, own shares in it, have representatives from each of the companies sitting on its board and or want their company to have limited liability for the debts and obligations of the joint venture. This type of joint venture is usually suitable if you will be collaboration on a longer term project and or your collaboration will be more risky and complex and therefore justifies the time and effort of setting up a separate company.



Manufacturing Agreement

What is it? This agreement is needed if you want to employ the services of another company an individual to manufacture goods/products for you for your business. The agreement should cover a number of key areas including manufacture of the goods, materials, specification, quality control, packaging, storage, confidentiality, data protection, insurance, pricing, payment, delivery, title and risk, intellectual property, disputes, force majeure, service of notices, liability and indemnity clauses.



Memorandum of Understanding

What is it? An MOU is a pre-contract, non-binding document setting out the key terms agreed by parties who intend to enter into a binding contract. It is also known as Heads of Terms, a Letter of Intent or a Term Sheet. It is a useful tool when two or more parties intend to enter into a future contract and want to identify, describe and agree, without it being contractually binding, the terms to be further negotiated and then recorded in a contractually binding contract. There will occasionally be statements in a MOU which are exceptions to the general approach that a MOU is not binding : this will occur if the parties put in statements which the MOU expressly states are to be of legally binding effect until a definitive contract is signed. If that is the case those statements will generally be binding. Why is it important? An MOU is useful to set out the progress made during negotiations, reduce the potential for misunderstandings, indicate the major issues which still need to be resolved and make it clear what the parties intend when they enter into the contract. Risks The disadvantage of a MOU is that it can take up a considerable amount of time and may distract the parties from working on negotiating a full and detailed binding contract. There have been occasions when the parties to a proposed commercial arrangement never actually agree or sign a definite contract and have gone on to implement their deal based only on the MOU. This creates a very uncertain legal position which may lead to disputes and legal problems.



Agency Agreement

What is it? The term “agent” is often used as shorthand in a business or legal context to mean a person authorised to act for or on behalf of another who is sometimes called the “principal” As a business you need to be able to distinguish whether or not a particular arrangement amounts to a commercial agency rather than another kind of agency or relationship. This is vital if you are to understand the various legal obligations, duties and liabilities that you owe your contractors/ agents and vice versa. There are different types of individuals and companies which describe themselves as “agents”. These include for instance – commercial agents, sales agents. Employment agents, escrow agents etc. Why is it important? A commercial agent is a kind of sales agent whose relationship with their principal is largely governed by the Commercial Agents (Council Directive) Regulations 1993 whereas the relationship between any other type of sales and their principal is largely governed by the common law and not by the Regulations. A “commercial agent” is defined by the Regulations as a “…self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of their principal or to negotiate and conclude such transactions on behalf of and in the name of that principal”. Risks All commercial agency arrangements must comply with the Commercial Agents Regulations 1993. In accordance with the European Withdrawal Act 2018( ad subject to the terms of any final Brexit deal) the Regulations will remain in force post-Brexit.In contrast a sales agent is a freelance self-employed individual or contractor who may or may not work for numerous clients. You need an Agency Agreement if you want to appoint a third party to act on your behalf, marketing and selling your products and services – generally in exchange for commission on any sales. An agency agreement sets out the terms and conditions of the relationship, the commission or fees the notice period and any exclusivity rights. Other ways in which a business can expand without considerable outlay are via a distributorship and a franchise. In contrast to a distributorship, an agent earns commission on sales but does not pay for the goods, own the goods or set the sale price charged to the customer.



Referral Agreement

What is it? A referral agreement is used where, in order to obtain more customers and sales and widen Business A’s customer base or sell into a new market, a supplier of goods or services (Business A) wishes to engage another person or business (Individual B or Business B) to effect an introduction/referral of new customers to Business A in return for which the agent receives a fee for the introduction/referral itself or for the introduction/referral where it results in a sale within a stated period after the introduction/referral. It is also known as an Introduction agreement. Examples of referrers/introducers are agents who introduce a seller of a business to a potential buyer or who introduce a potential investor to a business. Why is it important? If a business colleague is referring work to you or you are the referrer you should get a referral agreement that sets out the terms of your agreement. This will help avoid problems. A referral agreement can also be used where an e-commerce website wishes to increase its sales by allowing other websites to refer customers to them in return for a commission on sales obtained through such referrals. The fees can be either a fixed fee or percentage basis with payment when the referral is made or upon the first transaction or both. The fees and payment clause can be drafted so that if the refer fails to introduce any new business they will not get a fee.There are specific referral agreements for the introduction of clients for financial services eg investment advice and insurance products.



Licensing Agreement

What is it? There are numerous types of licensing agreements eg IP licensing agreement eg a trademark licence agreement, a licence to occupy property, a software licence agreement etc.A software licence agreement is an agreement between a software licensor (generally a software developer and/or owner) and licensee who will be using the licensed software in the course of a business or personally. Why is it important? We always recommend that our clients get a licensing agreement if for example they want to give a person or another business the right to use their technology, software or any other type of intellectual property. A software licence will set out what the user may or may not do with a piece of software thereby helping developers ensure that they maximise returns on their investments, restrict others from free use of their creative and inventive work and product software that remains stable across a broad range of computer systems.



End User Licence Agreement

What is it? This is a licence agreement between a software provider and a user where software is distributed en-masse through retailers or electronically eg Microsoft and people who use its software. The different types of end-user licences include a Web Wrap software licence (designed for use with software that is distributed electronically via download ) Click Wrap Licence (designed for use with software that can be distributed electronically via download or on physical media such as a CD or DVD-Rom, Shrink Wrap Licence (designed for use in or on the packaging of software that is distributed on physical media such as a CD or DVD-Rom).



Service Level Agreement

What is it? Businesses often seek to obtain services from other businesses for various reasons. In some cases, a simple service agreement is all that is needed especially where the services in question are to be provided over a short term.However, in some cases a long-term relationship and the need for service consistency is essential. In such cases a business owner may prefer to enter into a Service Level Agreement with the service provider. Why is it important? Commonly used in the IT & Technology industries, but also applicable in other areas of business especially where large-scale or complex services are involved Service Level Agreements set out the services to be provided under a contract and also sets out the levels of performance to which those services must be provided. Detailed provisions govern the monitoring of the performance of the services and the agreement. Risks The service provider is thereby incentivised to consistently provide services in line with the agreed performance levels. If it fails to meet the agreed service levels it is subject to penalties. Service level agreements are preferable to standard service agreements as they contain much more detail, enhanced clarity and accountability over and above standard service agreements.



Partnership agreement

What is it? There are 2 main types of partnership agreements: An unlimited partnership – This is a relationship between two or more parties carrying on business together to make a profit. It is usually referred to as a “partnership” or a “general partnership” to distinguish it from other types of partnership such as a limited liability partnership. A partnership can arise by law even if there is no agreement in writing and even if the parties did not intend to create a partnership. An unlimited partnership is not a separate legal entity unlike a company or a limited liability partnership. Therefore, its partners have unlimited liability for the partnership’s debts. A limited liability partnership – Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement setting out how the LLP will be run.



LLP agreement

What is it? This agreement applies when you have a limited liability partnership. Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. Why is it important? The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement (LLP Agreement) setting out how the LLP will be run.



Distribution agreement

What is it? A distributor buys goods from a supplier to sell on to customers. They can earn a profit margin based on the “mark-up” they add to the original sale price. A Distributorship agreement is an agreement whereby the manufacturer appoints the distributor on a “sole” or “non-exclusive” basis) to resell the manufacturer’s products in a particular territory/ies. In this case, the ownership of the goods is transferred to the distributor prior to the marketing and sale of the goods which means that the distributor may hold stocks of goods which they pay for and own – they therefore bear the risk as to whether they can resell the goods. There are different types of distribution agreements eg exclusive, sole and selective distribution agreements. Business relationships can sour if based on verbal agreements. Protect your rights by ensuring you have a written distribution agreement.



Model release letter

What is it? A signed Model Release Form protects your profit margin and your copyright. Whether you work in a marketing business graphic design or are a commercial vlogger or blogger you need to ensure that any photographs that you use in your business has a properly signed release form. Whilst you do not generally need written permission to take photos, if you take photos and wish to publish the photos on the internet or in any other way or if you are starting a photography business you can protect yourself from any liability or legal proceedings by using a Model Release Form or Letter. A Model Release Form is the contract between the photographer or User and the “model” (i.e. the subject or owner of the image or photograph). Designed to protect both parties it specifies the ways in which the images or models can or cannot be used (eg for advertising, to make prints, post on social media etc), the media formats, the use or not of the model’s name, the model’s rights (or not) to inspect the end product before publication and the expiry (or not) of the release. Why is it important? A Model Release Form is not about obtaining permission to take photographs – it is about obtaining signed consent to publish the photographs for commercial purposes. Whilst it is generally okay to take pictures of a person or people in a public place without written permission if you want to use that photo for specific commercial purposes eg to promote a product on the internet or elsewhere it is best to be safe and get a signed release form from the “model” or owner of the “model”. Risks But do get legal advice before you use a release form template as it may need adapting to fit your particular needs.And remember! If you want to use images for a purpose not originally agreed, you MUST get further signed consent.



Sales agency agreement

What is it? If you are a business selling products you may decide to employ the services of a sales agent. A sales agent is a freelance self-employed business or contractor who might or might not work for several clients. The term “sales agent” includes a “commercial agent” but it is usual to distinguish the two forms of agency by referring to someone as a sales agent only if they are not a “commercial agent” as the legal position of a “commercial agent” differs substantially from other forms of “sales agency”. The business that owns the products will be called the “Principal” and the sales agent will be called the “Agent”. The sales agent is paid commission only and so is motivated to make as many sales as possible to maximise their income.Central to the relationship between a business and their sales agent will be the “Agency Agreement”. The Sales Agency agreement will set out the product the agent will be selling, where the agent will be selling those products, how the sales are to take place, commission payable on all sales and the key rights and responsibilities of the parties. Why is it important? The use of sales agents as opposed to an employed sales team has a number of benefits for the business (i.e. the “Principal”) since commission is only payable on achieved sales, there are no fixed employment costs, and the agent will often already have a network of contacts ie established customer base, will know the market in their area and will have credibility with their customer base.



Sub-contracting agreement

What is it? Many business contracts allow one or both parties to sub-contract all or part of their obligations under a contract. This can be done via a letter termed a “Notice of Intention to Sub-contract” from the main contractor to the other party to the main contract or via a formal “Sub-contracting” agreement. Where a “Notice of intention to sub-contract” letter is used, the main contractor (ie sender of the letter) would inform the other party to the contract (ie the recipient of the letter) that the main contractor intends to subcontract certain of their obligations under a contract and will provide details of the subcontractor(s) to whom the obligations will be sub-contracted, a detailed description of the obligations to be sub-contracted with cross-references to the relevant parts of the Contract agreement between the main contractor and the other party to the contract agreement. The recipient will also be reminded that they are not a party to the sub-contract and that the main contractor will remain their primary contact person and will also remain liable for any acts of omissions of the subcontractors. As an option, the main contractor may also decide to enter into a formal “Sub-contracting” agreement with the sub-contractor and send a copy of this to



Franchise Agreement

What is it? Franchising your business lets you licence your business model to companies or individual in particular geographical areas and allows you to increase your profits while maintaining a significant degree of control over your brand. A Franchise agreement is an agreement under which the owner of a business grants a licence or licences to others (the “franchisees”) to operate that business in a particular area within the UK or internationally either on a “sole” or “non-exclusive” basis, for a fee therefore spreading their corporate identity and products or services without the expense of setting up new establishments. All franchisees will use a common identity including the name, trademarks, goodwill, other intellectual property and or products of the franchisor. The franchisor will also provide a “Quality Manual” which in effect is a rule book setting out all the relevant detail needed for the successful day-to-day running of the franchised business eg minimum standards and insurance requirements. The agreement will usually include a confidentiality clause protecting all commercially sensitive information and trade secrets from unauthorised disclosure thereby protecting the interests of the franchisor. Why is it important? Franchising has benefits for the franchisor and the franchisee. The franchisor can grow its business without having to open, staff and manage new premises or branches itself whilst the franchisee can manage his/her own business which has been already tested by the franchisor and has access to the franchisor’s experience and expertise. McDonalds and Kentucky Fried Chicken (KFC) operate their own restaurants and food outlets but also grant franchises to others to operate McDonalds and KFC businesses using their logos with McDonalds and Kentucky Fried Chicken exercising tight quality control over the restaurants, their location, food, health and safety etc.



Managing licenses

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Protecting your IP

Business Relationships

Writing a business plan

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Pure Business Law is the trading name for Pure Business Law Ltd-a private limited company registered in England & Wales with company registration number 10405413. Registered office and Principal place of business : Excel House, 3 Duke Street, Bedford. MK40 3HR. VAT number 265 5386 75.

 

 

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