As a business owner, have you ever asked yourself how much your business would be worth today? Even if you are not looking to sell imminently, or even at all, taking steps to ensure your business is in good shape maximises the value of your company, whether for a future buyer or eventual successor.
Below are just some legal considerations to bolster your business and refine its backstage operations.
1. Corporate structure and governance:
Having a clear and compliant governance structure that underpins your business is critical. Roles and responsibilities naturally evolve and, if left undocumented, can lead to disagreements and instability. Company policies and practices that promote accountability support an organisation’s long-term sustainability.
A good constitutional framework can provide a clear set of guidelines for effective operation of a company. The company’s articles of association and/or shareholders’ agreement are the foundational documents which outline the governance structure of a business. They deal with how a board governs the company’s decision making, define shareholder rights, establish powers of directors, contain meeting procedures and govern the relationship between company, board and its shareholders.
2. Employment law:
Falling foul of ever-changing employment laws can prove litigious and costly. The government have promised sweeping reforms to UK employment law and now is an opportune time to ensure that your contracts and policies are updated and compliant. Moreover, having robust and clear policies minimises the risk of claims from disgruntled employees, and sets out the procedures for dealing with employee queries and concerns.
3. Property and planning:
Most businesses operate from commercial premises, including offices, retail, industrial, or healthcare. Whether leasehold or freehold, identifying any potential issues sooner rather than later can give you increased flexibility. Commercial Property solicitors can assist with negotiating favourable lease terms preserving location-based value or consider whether the ownership structure of key properties is right for the business.
If you plan to expand or rearrange the floorplan of your premises, you should check whether landlords’ consent or planning permission is required, similarly you should check there are no restrictive covenants within any title document that could block your plans. Ensuring there are no legal obstacles to your plans can save you from expensive rectification works or unnecessary litigation.
4. Commercial contracts and IP:
All healthy businesses should have a comprehensive suite of commercial contracts that establish the basis on which any goods or services are provided. Clearly defined contractual obligations provide clarity, trust and manage parties’ expectations.
If you do have contracts in place, ensure that they are reviewed regularly to reflect any changes in law and in how you conduct your business. Check that your liability is limited and any onerous obligations are removed.
Use non-disclosure agreements where necessary as they can help to protect your business’ trade secrets from a potential buyer or any other third party you are doing business with.
Your intellectual property (IP) can be one of your most valuable assets, moreover, your entire business can depend on it. Failing to protect your brand through trademarks, your products through registered designs or patents, can drastically reduce the value of your business. Many registrable IP rights have time limits and require you to proactively renew them. Failure to do so could expose your business and your brand to the competition.
5. Litigation risk and regulatory compliance:
Litigation is unpredictable, stressful and costly. Minimising exposure through the integration of robust and effective risk management processes, debt collection procedures and clear contractual dispute provisions should be a key consideration for all business owners.
Failure to comply with wide-ranging environmental regulations, industry-specific rules and health and safety legislation can not only significantly devalue your business but can also lead to fines, licence suspensions and even prison time. It is therefore vital to review your business’ operations to ensure that they comply with any applicable legislation.
The Economic Crime and Corporate Transparency Act (ECCTA) continues to be implemented in phases. To ensure that the information that Companies House is provided with is accurate and is not being used to hide criminal activity, ECCTA focuses on three areas:
1. ID Verification;
2. Information sharing; and
3. New offences.
Failure to comply with ECCTA can lead to fines for both the company and its officers.
How can expert solicitors help your business?
Our expert solicitors can assist you to ensure compliance in all areas and, ultimately, guide you through the process of ensuring your business is as robust as it should be from a legal perspective.
There are also other important factors to consider with specialists, including analysing financial performance, developing and implementing a clear strategy and business plan. Forming a collaborative team of legal and financial advisers will provide you with rounded guidance to give your business a clean bill of health.
Contact Tees today on 0800 013 1165 for expert advice.
