Grant McCall, Solicitor considers what new year resolutions you should make for your business.
Quit drinking, quit smoking, learn a language, take up an instrument, get fit, improve diet… all good new years resolutions for the individual but what new years resolutions should you make for your business?
Increasing profits, attracting new clients and cutting expenditure are all business objectives and should always be at the forefront of a strategy. However most businesses accept that they should tighten their legal protection but remarkably there are some who put this to the bottom of the list. What a business may really need is to create, review or update its legal infrastructure to ensure it is bullet proof for 2011.
The simplest way for any business (whether a limited company, partnership or sole trader) to protect its trading position is to rely upon its own bespoke contract for business. As a non-exhaustive guide, the terms that should feature in such contract usually include spelling out the mechanics of payment, including interest for non-payment, timing and place of delivery and the liability of both parties throughout the transaction.
Terms and Conditions of business are not only essential for a new business but also for existing companies or traders who may currently rely on order forms and invoices, perhaps “lifted “ from their competitors to determine their terms of commerce.
As I find with most of my clients, the process of drafting terms and conditions is a two-way process so that each set of terms and conditions are unique to each particular business. Once in place, the terms can be used repeatedly as the contract for every commercial transaction.
What happens without a solid contract? As the floodgates of claims have been pushed wider ajar the likely consequences that follow a dispute in the absence of clear contractual terms may well be expensive litigation.
A further consideration is to ensure that the owners of businesses have an up to date ownership agreement that matches their objectives for the New Year. Anyone looking to set up a limited company, enter into a joint business venture, trade as a partnership or indeed anyone who is already a shareholder or partner needs a Shareholders or Partnership Agreement.
Terms of ownership agreements will regulate the transfer of shares or interests, the way a business will provide for the death, disability or retirement of an owner. Such issues and the future running of the business should be clearly set out from the start or as soon as possible. To leave the position unspoken or unclear could again lead to expensive litigation between the owners.
As far as resolutions go, this one will not only provide immediate reassurance and peace of mind but should continue to add benefit for years to come thus surviving 2011 and beyond. Now how many New Years Resolutions can boast that? Mine are lucky if they see out January…
For legal advice on Company Commercial, Commercial Property and Intellectual Property Matters (including a free first half hour consultation) e-mail firstname.lastname@example.org or telephone 0117 9898510. AMD have offices in Clifton Village, Henleaze and Shirehampton.
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