By Warren Bygrave - 29 Nov 2013
Leases, terms of trade and employment agreements - getting the
nuts and bolts of operating procedures right at the start is
essential for success. Have you covered all the necessary legal
areas? Are you satisfied that everything is in order and you are
prepared?
Finally in this series on Going into Business it is important to
turn your attention to the legal issues which can be involved once
structure and finance has been worked out. These will vary
depending on the type of business which you operate.
Leases
If you intend to occupy premises there will be a lease to
consider. Is the form usual? Is the landlord asking for a
personal guarantee? If so, ensure that you have protected
assets which you do not want to be included in that
guarantee.
Is the term suitable? You have to allow time to establish
your new business and potentially sell it. A thing to keep in
mind is that your liability can continue even when you sell.
Is the building in the right place, does it have the correct
amount of space, is the rental reasonable and can you use it for
your type of business? All these matters are important if you
are to be successful.
Terms of trade
If your business involves manufacturing or services, are your
original ideas, products and concepts adequately protected? Do
you have terms of trade which adequately protect your goods when
you supply your customers? If not, you can end up being an
unsecured creditor if your customer's business fails. Good
terms of trade will protect you from such an event. If you are
relying on having a regular supply of products or ingredients, do
you have good formal arrangements in place? If not, do you
have an alternative source available?
Employment agreements
If you are employing staff it is important to remember the
arrangement between an employer and an employee is not the same as
an ordinary commercial arrangement. Do you have good employment
agreements which clearly set out the job description, hours of
work, holidays and payment terms? It is a legal requirement
that there is a written agreement for all employees and that it
contains certain terms and conditions. Understanding these is
essential. Having an employment agreement that is tailored to
your business or at least takes into account your specific terms
and requirements can save a lot of time and trouble especially if
the relationship breaks down. As you will be aware, employees
have a huge influence on the business, good and bad. Dealing
with them fairly and reasonably sets a very good platform for a
successful relationship.
As I have said in this series, starting up a business is both
challenging and exciting. Doing the basics well, having good
plans, systems and documents and obtaining the right advice are all
essential elements in making it successful. We can help with
this.
In any event, good luck!
Contact
Warren
Bygrave