Starting Up

Starting Up

 

Starting a business is an empowering yet daunting time. The start-up costs are generally high and the returns in the first few months are low or non-existent.

 

Here you will find advice on some of the key areas of concern when starting your business. 

Hiring & Managing employees
Hiring & Managing employees

Find great staff, nurture them and build a great team.

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HR Policies
HR Policies

Stay legally protected.

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Protecting your IP
Protecting your IP

"Kill Piracy;Save Creativity" K.C.Kankanla

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Business Relationships
Business Relationships

Building solid, lasting business relationships.

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Starting an online business: E-Commerce
Starting an online business: E-Commerce

Making your online shop legally compliant.

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Buying & selling goods and services
Buying & selling goods and services

Are you ticking all the right boxes?

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Letting a commercial property
Letting a commercial property

Solid legal support for your business.

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Sale and purchase of Commercial Property
Sale and purchase of Commercial Property

Pragmatic, strategic, commercial and forward-thinking.

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Planning & Highways
Planning & Highways

Do i need permission or not?

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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.

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.




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.




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.





Managing licenses


Running an online business


Protecting your IP


Business Relationships


Writing a business plan


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.

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 Form


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 together with a letter to the sub-contractor and to the other party to the main contract.




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

  1. words (eg the trademark “Nandos”)
  2. pictures and words (eg the Pure Business Law trademark).
  3. slogans (eg the Lidl strap line “Big on quality, Lidl on price”)
  4. colours (eg the Cadbury Dairy Milk purple as owned by Kraft ).
  5. sounds (eg the Match of the Day theme song played when their logo appears at the beginning of football matches) and
  6. Logos (eg the Mac OS logo);
  7. 3D shapes (eg the Pepsi cola bottle shape)
Why is it important?

Registering a name or a logo gives you the following three benefits:

  1. 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.
  2. 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.
  3. 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.





HR Policies

Communications and equipment policy


What is it? This policy explains to employees the rules and procedures to follow when using the employer’s IT resources and electronic communication systems at work. It sets out the extent to which the business allows the use of its IT resources and the use of PCs, laptops, internet, emails, software and passwords. Why is it important? Having such a policy ensures that your employees are aware of and comply with your rules regarding the use of IT resources and communication systems while at work.




Data protection and data security policy


What is it? A data protection policy is an internal document that serves as the core of a business’s GDPR compliance practices. It explains the GDPR’s requirements to employees and states the business’s commitment to compliance. The policy does not need to include specific details on how the business will meet the Regulation’s requirements, as these will be covered in the business’s procedures. Why do you need a GDPR data protection policy? to provide the groundwork from which your business can achieve GDPR compliance. to make the GDPR understandable to your staff. to prove that your business is committed to GDPR compliance. Why is it important? We highly recommend our clients to have the following data protection related policies : a)Encryption policies b)Acceptable use policies c) Password policies c)Email policies d)Data-processing policies Risks Your business’s policies are at the heart of your business operations. They set out exactly how employees should handle certain issues, ensuring that everybody is following agreed best practices. Effective policies are all the more important now that the Data Protection Act 2018 and the GDPR (General Data Protection Regulations) are in place. The DPA and the GDPR are not just about implementing technological and organisational measures to protect the information your business stores. You also need to demonstrate your compliance, which is why data security policies are essential. Employee training is vital to ensure each of these policies is maintained. For advice and more information on Data Protection, contact your expert Data Protection solicitors at Pure Business Law.




Social media policy


What is it? A social media policy sets out how a business and its employees should conduct themselves on the internet and what is and is not appropriate for employees to post about their company on social networks. Why is it important? It helps protect your company’s online reputation. The policy must reflect the business culture and be designed to minimise risks such as employees making derogatory remarks about your business or workplace online.




Equal opportunities policy


What is it? This policy sets out the business’s commitment to treating its employees fairly and giving everyone the same opportunities for employment, pay and promotion without discriminating against anyone on the grounds of age, sex, race, gender, ethnic origins, gender etc (the nine protected characteristics”).




Flexible working policy


What is it? A flexible working policy is a policy that sets out different working arrangements where employees are given greater freedom in the hours they work and how they fulfil the obligations of their roles. You are legally obliged to provide your employees with details of your business’s flexible working policy and procedures Flexible working includes working from home, part-time working job sharing, compressed hours, flexible start and finish times and phased retirement. Why is it important?

The Advisory, Conciliation and Arbitration Service (ACAS) recommends that employers put in place a flexible working policy as best practice to ensure that you deal with flexible working requests consistently and to ensure that staff are all aware of how you deal with them.

Flexible working has advantages and disadvantages. Is flexible working right for your business? Contact us to discuss!




Health and safety policy


What is it?

A health and safety policy states the employer’s commitment to protect employees’ health and safety and to cooperate with other parties such as employees, supervisors, the health and safety representative to ensure a safe work environment.If you have five or more employees, you are legally required to have a written health and safety policy.

Why is it important?

If you do not have a written policy the Health and Safety Executive (HSE) can take action against you and prosecute you. Even if you do not have five employees it is best practice to have a written health and safety policy to make your health and safety arrangements clear. Consideration of the health, safety and welfare of staff is an integral part of the management process. The purpose of a Health and Safety policy is to establish general standards for health and safety at work and to distribute responsibility for their achievement to all managers, supervisors and other employees through the normal line management processes.

Risks

Managers must approach health and safety in a systematic way, by identifying hazards and problems, planning improvements, taking executive action and monitoring results. There should be an annual audit and regular risk assessments.




Grievance procedure


What is it?

You are legally obliged to provide your employees with details of your business’s grievance and disciplinary procedures. The grievance procedure is a tool by which a member of staff may formally have a grievance (i.e. “complaint”) regarding any condition of their employment heard by the Company management. Your grievance procedure should set out the process to be followed, to whom a grievance should be reported and the right to appeal a finding. The employee has the right to representation by a Trade Union representative or a work colleague.

Why is it important?

Your disciplinary policy should include examples of the types of conduct or behaviour that will lead to disciplinary action as well as information about the process your business will follow in investigating and handling a disciplinary matter. You also need to set out the names of the people in your business who will deal with disciplinary matters and any appeals arising from the disciplinary process.

It is also good practice to have a Whistleblowing policy, a Bullying and harassment policy and a smoking, drugs and alcohol policy alongside your standard grievance and disciplinary procedures.




Redundancy policy


What is it? A redundancy policy provides employers with detailed procedures to follow within a business when making staff redundant so avoiding possible unfair dismissal claims. The policy also provides employees with information regarding the procedures the employer must follow thereby helping to avoid uncertainty for staff. It sets out each step of the redundancy process and outlines the statutory settlements for redundant staff. Employees who are made redundant and have at least 2 or more years continuous service are entitled to statutory redundancy pay. Why is it important? Having a redundancy policy in place will provide an employer with a clear framework to carry out redundancies and provides employees with clear notice of how any redundancy would be undertaken.




Sickness policy


What is it?

If you have employees, you are required to set out details of their sick pay and leave entitlements in their employment contracts.

A sickness policy sets out your procedures for dealing with and managing employee sickness absences and return to work eg how you want your staff to notify you when they are sick, whether your company offers any enhanced sick pay (ie contractual sick pay) over the minimum statutory sick pay (SSP), what absence levels will trigger the beginning of the disciplinary procedure, your policy regarding time off for medical appointments.

Why is it important?

Having a sickness policy in place is not a legal requirement however it can be reassuring and can help to remove some of the stress and uncertainty associated with sickness absence. It can also help to ensure that sickness absences are handled fairly and consistently across your work force.

Risks

When writing your policy you must remember that if an employee is ill and or off work due to a disability you must make any reasonable adjustments to help that employee remain at work or return to work before imposing any sanction under your sickness absence policy. This could include agreeing to provide them with a special type of chair (if the employee has back pain), changing their working hours so they can attend work more easily or providing a phased return to work ie the employee works for 3 or 4 hours for the first few weeks and then increases their working hours gradually.

If you do not have a sickness policy and you treat staff inconsistently you may end up being sued by an employee for discrimination.




Maternity policy


What is it? This is required by law. A maternity leave policy sets out the policies and procedures that your business has to manage pregnancy absence and return to work. Why is it important? You must ensure that written information about the rights and policies applicable to new and expectant parents is available to all staff members so that they are aware of their rights and obligations. Your maternity policy should also include information about time off work for antenatal or pre-adoption appointments, the rules about leave and pay during the child’s first 12 months and return to work rights of the expectant partner. Your policy should also include information about whether your business will offer the minimum statutory rights or an enhanced entitlement.




Parental leave policy


What is it? This is required by law .A parental leave policy sets out the policies and procedures that your business has to manage parental leave for reasons associated with childcare eg when a parent has to take time off to look after children for one reason or the other and return to work. Your parental leave policy should set out the policies and procedures that your business has to manage parental leave after pregnancy absence and return to work. Why is it important? You must ensure that written information about the rights and policies applicable to new and expectant parents is available to all staff members so that they are aware of their rights and obligations. Your parental leave policy should also include information about time off work for antenatal or pre-adoption appointments, the rules about leave and pay during the child’s first 12 months and return to work rights of the expectant partner. Your policy should also include information about whether your business will offer the minimum statutory rights or an enhanced entitlement.




Paternity policy


What is it? This is required by law . A paternity leave policy sets out the policies and procedures that your business has to manage paternity leave either when a father wants to take time off to look after his child after childbirth or adoption etc. and return to work. You must ensure that written information about the rights and policies applicable to new and expectant parents is available to all staff members so that they are aware of their rights and obligations. What is it important? Your paternity leave policy should also include information about time off work for antenatal or pre-adoption appointments, the rules about leave and pay during the child’s first 12 months and return to work rights of the expectant partner. Your policy should also include information about whether your business will offer the minimum statutory rights or an enhanced entitlement.




Shared parental leave policy


What is it?

This is required by law. A shared parental leave policy sets out the policies and procedures that your business has to manage shared parental leave and return to work.

Why is it important?

Your shared parental leave policy should also include information about time off work for antenatal or pre-adoption appointments, the rules about leave and pay during the child’s first 12 months and return to work rights of the expectant partner. Your policy should also include information about whether your business will offer the minimum statutory rights or an enhanced entitlement.




Environmental policy


What is it? Although not a legal requirement it is good business practice to have an Environmental policy. An Environmental policy confirms that your company is committed to continuous improvement in managing environmental issues including proper management and monitoring of waste, reduction of pollution and emissions, compliance with environmental legislation and environmental codes of practice, training for staff and the monitoring of environmental performance. Why is it important? This will in turn assist you in building and maintaining good relations with the community and the general public. Once written it should be signed by the most senior director in the company to show that it is company policy and should be reviewed on a regular basis alongside your Health and Safety policies. Whilst not required by law an Environmental policy may also come in useful if you are bidding for medium-sized and large tenders. We are experienced in preparing such policies for offices, shops, construction, automotive workshops, hotels, transport ,logistics, parcel delivery, restaurants, manufacturing cleaning companies.





Starting an online business

Commercial lease


What is it? A commercial lease is an agreement between a landlord and a business for the rental of a property for business purposes for a set period in return for the business paying rent to the landlord. It sets out the rights and obligations of the landlord and the business in relation to the property. The law relating to business leases differs from the law relating to residential leases. You will need a business lease if you have a business and wish to carry on your business from the commercial property. A properly written commercial lease is vital to carry on your business.




Home office rental agreement


What is it?

A home office rental agreement is an agreement between an owner or lessee of property to share their home office space with another person. These agreements are usually used by start-ups and home-based businesses and will be in the form of a licence agreement. The licensor will be the owner or tenant of the property and the licensee will be the sharer who may be an individual or a company. If more than one individual sharer it is essential that they be all named on the agreement so that they remain jointly and severally liable under the rental agreement. The licence fee should be inclusive of the service costs eg internet, utilities, etc.

Why is it important?

If your business is a lessee, you must check your lease and check with your landlord to ensure that the grant of a licence to the sharers will not be a breach of your obligations as a tenant.




Office sharing agreement


What is it?

Office space can be expensive in city centres and town centres. An office sharing agreement is an agreement between an owner of office space and another business which wants to share its office space. It is used where the owner of the property or lessee wants to share their office space with a business or individual or where two businesses or sole traders want to share the same office space. This agreement will be in the form of a licence agreement. If the office space is one room the licence will not grant each business or individual a defined and fixed space within the room but will grant the businesses and individuals the office space. The licence fee should be inclusive of the service costs eg internet, utilities, etc.

Why is it important?

If your business does not own the property you must check your lease and check with your landlord to ensure that your grant of a licence to the sharers will not be a breach of your obligations under your business tenancy.




Rent deposit deed


What is it?

A rent deposit is a sum of money paid by a commercial tenant as security to their landlord prior to or at the grant of a commercial lease in respect of a commercial property rental.

A rent deposit deed is the document which sets out how the landlord will safeguard a commercial tenant’s deposit. It works in a similar manner to rent deposits for residential lettings however in this case the deposit is usually held by the commercial landlord and not by a government- backed tenancy deposit scheme as in the case of residential rent deposits.

Why is it important?

A rent deposit deed protects the landlord and the tenant. Under the rent deposit deed, the deposit remains the property of the tenant however if the tenant does not pay the rent or breaches any fundamental term of the lease the landlord can take money out of the deposit in recompense.

Rent deposit deeds are standard in commercial leases and provide peace of mind to a commercial landlord especially if the prospective tenant eg a start-up business or a sole trader cannot prove his/her trading credentials and creditworthiness. It gives a guarantee of easy access to funds should the tenant default. It is also beneficial for the tenant as it is akin to “savings” which will be returned to the tenant in future with any accrued interest if there is no breach of covenant and it is also a fund which the landlord may use to set off any breach of covenant by the tenant without the tenant having to incur further expense.




Lease agreement


What is it? A lease is an agreement between a landlord and a business for the rental of a property for a set period in return for the tenant paying rent to the landlord. It sets out the rights and obligations of the landlord and the tenant in relation to the property. A lease can be for business or residential use. Why is it important? A commercial or business lease is an agreement between a landlord and a business for the rental of a property for business purposes. A residential lease is an agreement between a landlord and an individual for the rental of a property for residential use. The law relating to business leases differs from the law relating to residential leases. You will need a business lease if you have a business and wish to carry on your business from the commercial property. You will need a residential lease if you wish to rent property from a landlord for residential purposes.




Building Works and Construction agreement


What is it? Before you get building work done, check if you need permission or approval. Get quotes, check there is insurance in place and get a written contract. A building works/construction contract is a written agreement between the parties involved in the building or alteration of any structure. It sets out the rights and obligations of the parties and other parties involved eg sub-contractors, the administration procedures and the contract administrator if there is one. Why is it important? If you are a builder or a contractor doing work for a client or you are the client, you must ensure that the work arrangement is clear and that your contract sets out your work rights and obligations as well as the obligations of your client or the builder/contractor. A contract can be created for a specific project or you may wish to use a standard contract with amendments to fit the project. An example of a standard works contract is the JCT minor works building contract, which is designed for small, basic construction projects where the work is of a simple nature. Risks When checking the contract ensure that the contract describes the purpose of the contract; the work that will be done; the financial information eg the contract prices, deposit, schedule of progress payments, snagging, final payment and interest; payment due date and fees; project description; the handling of variations to the work order; dispute resolution; insurances and a signature line. Always ensure that your client signs the contract before you begin the work. Our construction solicitors can provide you with guidance on the different types of construction contracts and on which type of agreement is best for you. We can also help you negotiate a contract to protect your rights, assist you in reviewing contracts before you sign and provide you with representation in case of a breach of contract. Give us a call today at 01234 938089 or contact us online to learn more about the legal assistance we can provide.




Co-working agreement


What is it?

A coworking agreement is an agreement that offers an occupier (individual or business) shared office space for terms ranging from weekly, month-to-month to as long as five to ten years. Instead of a rental agreement you enter into a service contract with your prospective occupant/licensee. The co-worker pays an occupancy or licence fee not rent.

The space offered can range from one or several desks in an open plan office space in a building occupied by several businesses to a private office in a multi-occupied office building. Co-workers pay for the space they occupy, networking access, the communal areas – eg common room, kitchens etc, internet connection, special events and the use of meeting and conference rooms.

A coworking agreement is not considered a lease. It is far closer to a licence eg an agreement that a gym user signs to attend a gym or even an agreement that a guest signs to lodge at a hotel. A coworking agreement should contain clauses that reflect the communal nature of shared spaces and a collaborative and positive working atmosphere.

Why is it important?

A properly drafted coworking agreement should clearly define the space to be used by the occupier and the amenities to be shared with the other occupants. The agreement should also outline these essential areas eg description of services to be provided– ie hours of access to office space, internet access, mail and workshops; use of services; duration of the licence – weekly, monthly or yearly; renewals and terminations; rules of the premises/code of conduct- including inappropriate use of the premises and prohibited activities ; confidentiality- in view of the communal nature of coworking a confidentiality clause is essential; payment terms; limitation of liability, insurance and possibly disclaimers.

Risks

For landlords and tenants, the main advantage of a coworking agreement is that it is more cost-effective and provides flexibility to businesses. When properly drafted it poses far less risk than a traditional commercial lease as it is generally simple and straightforward, and does not have the significant legal costs, long contracts and drawn out legal process that commercial leases have.





Managing licenses


Running an online business


Protecting your IP


Business Relationships


Writing a business plan


Buying & Selling Goods & Services

Terms and conditions for supply of services to business customers


What is it? Terms and conditions set out the rules and specifications which apply in every supply of services that a seller makes and helps to make everyone aware of their rights and obligations from the outset. Why is it important? Make sure you protect your business interests with professionally prepared terms and conditions. When supplying services to a business your terms and conditions should cover issues such as timing and termination of supply, orders, specifications, obligations, pricing, payment, intellectual property, confidentiality, warranties, liability and termination.




Terms and conditions for sale of goods to business customers


What is it? Terms and conditions set out the rules and specifications which apply in every sale of goods that a seller makes and helps to make everyone aware of their rights and obligations from the outset. Why is it important? When selling goods to a business your terms and conditions should cover the nature of products to be sold, orders, delivery, pricing, payment, risk, warranties, defects, liability and confidentiality.




Heads of terms (HOTs)


What is it? This is similar to a Memorandum of Understanding (MOU)s, Term sheet or Letter of intent. The heads of terms set out the key terms agreed by the parties before entering a business transaction. It is not contractually binding. Heads of Terms are usually set out in a letter or document setting out the key terms agreed by parties who intend to enter a binding contract. It is also known as Letter of Intent, a Memorandum of Understanding (MOU) or a Term Sheet. It is a useful tool when two or more parties intend to enter 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 heads of terms which are exceptions to the general approach that heads of terms are not binding: this will occur if the parties put in statements which heads of terms expressly state 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? Heads of terms are 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. The disadvantage of Heads of terms 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. Risks 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 Heads of terms. This creates a very uncertain legal position which may lead to disputes and legal problems.




Letter of intent (LOI)


What is it? A Letter of Intent 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 Memorandum of Understanding (MOU) 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 letter of intent which are exceptions to the general approach that a letter of intent is not binding: this will occur if the parties put in statements which the letter of intent 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? A letter of intent 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. The disadvantage of a letter of intent 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. Risks 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 letter of intent. This creates a very uncertain legal position which may result in disputes and legal problems.




Invoices


What is it? An invoice is a statement setting out the goods and or services that have been supplied by a seller to a buyer and the money owed for those goods and or services. It is created by a seller or supplier to request payment for goods sold and or services provided. It is also called a bill. Why is it important? It identifies the trading partners, specifies the terms of the deal and provides information on the payment figure, the available methods of payment and the payment terms i.e. the maximum amount of time that a buyer had to pay for the goods and or services that they have purchased from the seller.




Sales of goods agreements





Purchase order


What is it? A purchase order is prepared by a buyer when the buyer orders goods or services from a seller. The purchase order will indicate the type of goods, quantity of goods and the price the buyer is willing to pay for the products and or services.

Once the seller accepts the purchase order it becomes a legally binding contract as the seller has agreed to sell the goods and or services at the prices put forward by the buyer. The seller will then issue an invoice to the buyer based on the purchase order.

Why is it important?

Purchase orders are important for businesses as it is instrumental in tracking expenditure, makes orders easier to track, helps avoid audit problems and provides contractual legal protection for the buyer and the supplier.

Alongside a purchase order system, it is vital that a company has strong credit management practices to safeguard cash flow from bad debts and late payment.

A strong debt collection process is vital to ensure payment is made when the goods or services have been delivered.

Invoice promptly and accurately and chase up with reminders. If a customer will not pay or ignores payment requests take action – Appoint a debt collection agency, take debt recovery action through the courts or pass the debt to a solicitor.

Pure Business Law has experienced debt collection lawyers who can assist you with debt recovery.




Services agreement


What is it?

A Service agreement also known as a Service contract or Contract for Services is a written agreement between a service provider and a customer setting out agreed terms for the supply of services. The terms should include details of the services to be provided, location of provision of the services, payment. Limitation of liability clause, tools or materials to be used, termination of the agreement, ownership of intellectual property clause and dispute resolution clauses.

Why is it important?

A services agreement is required when a business wants to engage another business to supply services. If your business is the service provider, you should use a service contract whenever you are hired by a customer to complete a service. If you are the customer and the service provider does not supply the contract, you can use a Service agreement to ensure that the terms of the service relationship are clear.

Having a services agreement will ensure that the parties to the contract understand their obligations and will protect the positions of both businesses in the event of termination of the contract or legal proceedings.





Managing licenses


Running an online business


Protecting your IP


Business Relationships


Writing a business plan


Letting a commercial property

Commercial lease


What is it? A commercial lease is an agreement between a landlord and a business for the rental of a property for business purposes for a set period in return for the business paying rent to the landlord. It sets out the rights and obligations of the landlord and the business in relation to the property. The law relating to business leases differs from the law relating to residential leases. You will need a business lease if you have a business and wish to carry on your business from the commercial property. A properly written commercial lease is vital to carry on your business.




Home office rental agreement


What is it?

A home office rental agreement is an agreement between an owner or lessee of property to share their home office space with another person. These agreements are usually used by start-ups and home-based businesses and will be in the form of a licence agreement. The licensor will be the owner or tenant of the property and the licensee will be the sharer who may be an individual or a company. If more than one individual sharer it is essential that they be all named on the agreement so that they remain jointly and severally liable under the rental agreement. The licence fee should be inclusive of the service costs eg internet, utilities, etc.

Why is it important?

If your business is a lessee, you must check your lease and check with your landlord to ensure that the grant of a licence to the sharers will not be a breach of your obligations as a tenant.




Office sharing agreement


What is it?

Office space can be expensive in city centres and town centres. An office sharing agreement is an agreement between an owner of office space and another business which wants to share its office space. It is used where the owner of the property or lessee wants to share their office space with a business or individual or where two businesses or sole traders want to share the same office space. This agreement will be in the form of a licence agreement. If the office space is one room the licence will not grant each business or individual a defined and fixed space within the room but will grant the businesses and individuals the office space. The licence fee should be inclusive of the service costs eg internet, utilities, etc.

Why is it important?

If your business does not own the property you must check your lease and check with your landlord to ensure that your grant of a licence to the sharers will not be a breach of your obligations under your business tenancy.




Rent deposit deed


What is it?

A rent deposit is a sum of money paid by a commercial tenant as security to their landlord prior to or at the grant of a commercial lease in respect of a commercial property rental.

A rent deposit deed is the document which sets out how the landlord will safeguard a commercial tenant’s deposit. It works in a similar manner to rent deposits for residential lettings however in this case the deposit is usually held by the commercial landlord and not by a government- backed tenancy deposit scheme as in the case of residential rent deposits.

Why is it important?

A rent deposit deed protects the landlord and the tenant. Under the rent deposit deed, the deposit remains the property of the tenant however if the tenant does not pay the rent or breaches any fundamental term of the lease the landlord can take money out of the deposit in recompense.

Rent deposit deeds are standard in commercial leases and provide peace of mind to a commercial landlord especially if the prospective tenant eg a start-up business or a sole trader cannot prove his/her trading credentials and creditworthiness. It gives a guarantee of easy access to funds should the tenant default. It is also beneficial for the tenant as it is akin to “savings” which will be returned to the tenant in future with any accrued interest if there is no breach of covenant and it is also a fund which the landlord may use to set off any breach of covenant by the tenant without the tenant having to incur further expense.




Lease agreement


What is it? A lease is an agreement between a landlord and a business for the rental of a property for a set period in return for the tenant paying rent to the landlord. It sets out the rights and obligations of the landlord and the tenant in relation to the property. A lease can be for business or residential use. Why is it important? A commercial or business lease is an agreement between a landlord and a business for the rental of a property for business purposes. A residential lease is an agreement between a landlord and an individual for the rental of a property for residential use. The law relating to business leases differs from the law relating to residential leases. You will need a business lease if you have a business and wish to carry on your business from the commercial property. You will need a residential lease if you wish to rent property from a landlord for residential purposes.




Building Works and Construction agreement


What is it? Before you get building work done, check if you need permission or approval. Get quotes, check there is insurance in place and get a written contract. A building works/construction contract is a written agreement between the parties involved in the building or alteration of any structure. It sets out the rights and obligations of the parties and other parties involved eg sub-contractors, the administration procedures and the contract administrator if there is one. Why is it important? If you are a builder or a contractor doing work for a client or you are the client, you must ensure that the work arrangement is clear and that your contract sets out your work rights and obligations as well as the obligations of your client or the builder/contractor. A contract can be created for a specific project or you may wish to use a standard contract with amendments to fit the project. An example of a standard works contract is the JCT minor works building contract, which is designed for small, basic construction projects where the work is of a simple nature. Risks When checking the contract ensure that the contract describes the purpose of the contract; the work that will be done; the financial information eg the contract prices, deposit, schedule of progress payments, snagging, final payment and interest; payment due date and fees; project description; the handling of variations to the work order; dispute resolution; insurances and a signature line. Always ensure that your client signs the contract before you begin the work. Our construction solicitors can provide you with guidance on the different types of construction contracts and on which type of agreement is best for you. We can also help you negotiate a contract to protect your rights, assist you in reviewing contracts before you sign and provide you with representation in case of a breach of contract. Give us a call today at 01234 938089 or contact us online to learn more about the legal assistance we can provide.




Co-working agreement


What is it?

A coworking agreement is an agreement that offers an occupier (individual or business) shared office space for terms ranging from weekly, month-to-month to as long as five to ten years. Instead of a rental agreement you enter into a service contract with your prospective occupant/licensee. The co-worker pays an occupancy or licence fee not rent.

The space offered can range from one or several desks in an open plan office space in a building occupied by several businesses to a private office in a multi-occupied office building. Co-workers pay for the space they occupy, networking access, the communal areas – eg common room, kitchens etc, internet connection, special events and the use of meeting and conference rooms.

A coworking agreement is not considered a lease. It is far closer to a licence eg an agreement that a gym user signs to attend a gym or even an agreement that a guest signs to lodge at a hotel. A coworking agreement should contain clauses that reflect the communal nature of shared spaces and a collaborative and positive working atmosphere.

Why is it important?

A properly drafted coworking agreement should clearly define the space to be used by the occupier and the amenities to be shared with the other occupants. The agreement should also outline these essential areas eg description of services to be provided– ie hours of access to office space, internet access, mail and workshops; use of services; duration of the licence – weekly, monthly or yearly; renewals and terminations; rules of the premises/code of conduct- including inappropriate use of the premises and prohibited activities ; confidentiality- in view of the communal nature of coworking a confidentiality clause is essential; payment terms; limitation of liability, insurance and possibly disclaimers.

Risks

For landlords and tenants, the main advantage of a coworking agreement is that it is more cost-effective and provides flexibility to businesses. When properly drafted it poses far less risk than a traditional commercial lease as it is generally simple and straightforward, and does not have the significant legal costs, long contracts and drawn out legal process that commercial leases have.





Managing licenses


Running an online business


Protecting your IP


Business Relationships


Writing a business plan


Sale and Purchase of Commercial Property

Licence to assign


What is it? If you are a landlord of commercial property, and your lease to your tenant includes a provision that says that your tenant cannot assign the lease to another (the “assignee”) without your consent and your tenant wants to assign or transfer their lease obligations to another commercial tenant you need a licence to assign to give them your consent. Why is it important?

If the lease absolutely prevents assignment, then you can refuse consent without stating a reason. However, if the lease prohibits assignment without the landlord’s consent the landlord must have a good reason for refusing consent. If the tenant considers that the landlord’s reason is unreasonable the tenant can challenge the refusal in court.

A tenant’s request to assign the lease may be made orally, by letter or by email as there is no prescribed form for a tenant’s application for consent to assign. A landlord can charge a tenant a fee to register an assignment. Landlords generally insist that the tenant or lessee gives a guarantee (Authorised Guarantee Agreement “AGA”) in the lease to be responsible for any breaches of covenants by the assignee so that the landlord can claim against the original tenant if the assignee breaches any of its obligations under the lease.




Licence to sublet


What is it?

A licence to sublet is an agreement between a landlord and a tenant that gives the tenant the right to sublet part or the whole of the property to another tenant (the “sub-tenant”).

If the lease absolutely prevents sub-letting, then you can refuse consent without stating a reason. However, if the lease prohibits sub-letting without the landlord’s consent the landlord must have a good reason for refusing consent. If the tenant considers that the landlord’s reason is unreasonable the tenant can challenge the refusal in court.

Why is it important?

Where there is a sub-lease the sub-lessee’s landlord is the tenant or lessee so if the sub-lessee breaches its obligations under the sub-lease the lessee or tenant is the only person entitled to take action against the sub-lessee. Landlords generally insist that the sub-tenant joins in the licence to sublet so that the landlord can claim against the sub-tenant if there is any breach of its obligations under the sub-lease.




Sale Agreement


What is it?

If you are selling a commercial property, we will prepare the sale contract and related documents, deal with all enquiries raised by the buyer’s solicitors, report to you and advise you and once the contract has been agreed, complete the transaction as quickly and effectively as possible.




Purchase Agreement


What is it? If you are buying a commercial property we will review, amend and advise you on the contract, raise all relevant enquiries, conduct searches, report to you, advise you and then once the parties have agreed the contract complete and register the conveyance as quickly and effectively as possible





Managing licenses


Running an online business


Protecting your IP


Business Relationships


Writing a business plan


Planning & Highways

Negotiating Planning Agreements and Unilateral Undertakings


What is it?

These legally binding documents are required in many cases under S106 of the Town and Country Planning Act 1990 to be entered into with the Local Planning Authority (LPA) in conjunction with a planning permission.

Why is it important?

The objective is to lessen the impact of the development where there is a need for new or improved infrastructure/services and if applicable, secure Affordable Housing provision.




Advising on infrastructure issues and third party rights


What is it? Development of any area of land can involve a number of issues such as ensuring there is access from the site to public roads and servicing by the various utility undertakers. Other matters that may need to be addressed before applying for planning permission or starting construction are extinguishing/diverting rights of way running through the land, remedying contamination and ensuring protection of wildlife/vegetation or items of archaeological importance.




Submitting objections and alternative proposals


What is it? Property occupiers can be significantly affected by development carried out by neighbours and developers, in which case there are opportunities to object to such proposals early in the planning process.




Resisting Planning Enforcement


What is it? When persons are subject to enforcement action by a LPA there are legal means to examine the validity of the action taken and if appropriate challenging the decision via an appeal.




Advising on Permitted Development Rights


What is it?

There are many instances where a development or change of use will not require a planning application to be submitted to the LPA. These are categorised as being within Permitted Development Rights. The rules applying are, however, complex and specialist legal advice obtained before going ahead with a project will minimise the risks of mistakes being made.




Applying for Lawful Development Certificates


What is it?

Where permitted development rights exist or immunity against planning enforcement applies through passage of time an application can be made to the LPA to certify the lawfulness of the development. In such cases, evidence needs to be submitted in support of the application which is where legal advice can assist.