Are you in full control of your business? Are your business assets fully protected?
Have you safeguarded your business and family in the event of your incapacity, insolvency or death?
Katie Hughes, Solicitor and commercial law specialist offers reasons why you should act now to protect your business.
WHAT IF your business should suffer financially, you are in an accident or struck down by an illness so debilitating that you can no longer continue to manage your own affairs or business? Are appropriate legal arrangements in place to protect not only yourself and your business but also your family should the worst happen?
Consider also what the position would be should you become involved in a dispute with your business associates or with a client or customer or competitor. Regardless of whether you are at fault the consequences can be far reaching and costly.
There are steps which you can take to provide for a number of situations.
Choose limited liability
Converting from a sole trader or partnership to a private limited company or limited liability partnership means that you can avoid jeopardising more than what you have invested in your business. Choosing a limited liability corporate vehicle is not necessarily a fail safe option and will not necessarily protect all your personal wealth, for example, personal guarantees will need to be honoured and there are a range of statutory provisions designed to protect creditors where a director or member has acted improperly or irresponsibly. In the majority of circumstances however, converting to a corporate vehicle which offers limit liability will limit your financial exposure.
Draw up a Shareholders’ or Partnership Agreement
Such agreements set out how the business is to be controlled, arrangements for profit- share, how decisions are to be made, provide mechanisms for members wishing to leave the business, detail how disputes should be resolved and prescribe what should happen upon the death, incapacity or insolvency of one of the members.
Protect your Goodwill
If your business relies on its trading name or logo as a projection of goodwill to your client base then you should take steps to protect this important asset of your business from exploitation by your competitors by seeking specialist help in formal registration at the UK Intellectual Property Office.
Put together Terms of Business
Terms and conditions setting out on what basis work will be carried out should be seen as a vital commercial safeguard for all businesses. In particular, these can prove invaluable in the event that a party fails to comply with its obligations in relation to the contract.
Create a Lasting Power of Attorney
If you are suddenly unable to deal with your personal and business affairs then your family and business may suffer unnecessarily, as relatives and business associates do not automatically have the ability to make decisions for you if you cannot. By making a Lasting Power of Attorney you have the power to choose who you would want to make decisions for you if you become unable to deal your business and personal affairs yourself.
Make a Will
If you die without a Will your assets will be distributed according to the law rather than in accordance with your wishes
Katie and her colleagues offer a free half hour specialist consultation. E-mail firstname.lastname@example.org or email@example.com or telephone 0117 962 1205 and quote reference PYB2 to arrange your consultation.