Tip 1 – Protect your personal property

When forming a business ensure your personal assets are properly protected. Consider creating a company rather than a partnership. In a partnership all the partners are joint and severally liable for the others debts and mistakes incurred in the name of the partnership. A company on the other hand has its own legal identity and is therefore liable for its own debts as a corporate body -protecting your personal assets in event of insolvency.

Tip 2 – Find a good solicitor

Finding a good business solicitor is crucial when you are making life-changing decisions involving your business. Many firms will have solicitors specialising in areas of law such as commercial, corporate and employment. Do not be tempted to settle for your local high street one-man band solicitor dabbling with specialist work. Find a firm offering expertise in the services your business needs. Don’t be afraid to ask your solicitor for references.

Tip 3 – Obtain prompt legal advice

If you seek the advice of an experienced commercial solicitor early on in the creation of your business or before any major transactions, you will avoid incurring legal problems in the future. Your solicitor can offer you legal advice personalised to the commercial interests of your business. You can then start your business on the right footing.

Tip 4 – Design your own terms & conditions

Many businesses do not give much thought to their terms & conditions of business- if they even have any! Your T & Cs should govern any transactions your company makes, dictating when and how you get paid and the consequences of late payment. Think about how you want to conduct business and work with your solicitor to produce watertight T & Cs.

At the start of every transaction ensure that your customers agree to your T & Cs prior to contracting.

Tip 5 – Ensure all commercial transactions are in writing

Ensure you record commercial agreements in writing - irrelevant of the size or cost of the transaction. Signing a contract is the most secure way to conduct business, as the contract should detail all relevant T & Cs of the transaction. Ensure any verbal agreement is backed up in writing, signed by both parties and that the other party has a copy for their record. This paper trail should prevent disputes in the future.

Tip 6 – Obtain insurance for your business

Do your research before taking out any commercial insurance. Ask your commercial contacts if they have any particular recommendations.

Small business insurance can be composed of many elements, so it is crucial to establish what cover you need. For example do you need professional indemnity insurance, or particular cover for valuable assets and what quantity of employee insurance will you require. Make sure your broker knows this before obtaining quotes.

Tip 7 – Protect your intellectual property (‘IP’)

IP is a highly undervalued asset in many small businesses. Protecting IP is particularly relevant for businesses in a niche market or who provide specialist services. If you do not protect your IP, then you will have no protection from infringement when someone steals your idea, design or literature.

There are 4 main types of IP - copyright, patents, designs and trademarks. Each is capable of legal protection but not all are automatically protected. For example if you design a new logo for your business, it’s worth considering registering this design and getting a ‘Registered Design Number’. If you then find another company using your design without permission, you can sue them for infringing your IP. Conversely, if you want to prototype a new product, it’s advisable to do a patent search prior to finalising designs, to ensure you are not infringing anyone else’s IP.Our specialist intellectual property solicitors can help.

Tip 8 – Ensure employment contracts are clear and comprehensive

Employees are a critical part of every business. Preparing a clear and comprehensive employment contract is vital to a successful employment relationship. The contract should detail working hours, rate of pay, responsibilities and duties along with generic information regarding pay dates, annual leave and sick leave entitlement. Most importantly it should be simple and clear so employees understand their rights and know what is expected of them. It’s worth instructing a solicitor to prepare a template contract, which can be altered for individual employees.

Tip 9 – Know your duty of care

There are implied terms in any employment contact, defining an employer’s duty of care to their employees. One of the most crucial is the duty to provide a safe working environment. This involves regulating everything from the layout of an employee’s desk to delivering safety training.

Tip 10 – Keep yourself up to date with legal developments

To be a successful employer you must keep up to date with employment law. At some point you will probably need a statement of employment particulars, dictating your internal business policies and procedures. This is also something your employment solicitors can help with. In order to remain legally compliant keep yourself updated with any developments in the law and reflect these changes in your employment policies.