Legal Tips for Start-Ups

Legal Tips for Start-Ups

Whether you have found the perfect business idea or always dreamed of starting your own company, there are a few essentials you will need to consider in order to protect yourself and help your business grow. 

We’ve set out the “Legal Fundamentals” for you:

Business Structure: Registration and Shareholders’ / Partnerships’ Agreement

The steps to undertake will depend on your chosen business model, eg. Whether you intend to practice as a sole trader, create a partnership or create a limited company.  For each business medium, there will be a registration process to undergo, with Companies House and / or HMRC.

If you decide to team up in your business venture, one thing you’ll need is a contract with your business partner.  For instance, the law defines a partnership as “the relation which subsists between persons carrying on a business in common with a view of profit”.  It is therefore very simple to be bound by the legislation on Partnership and without a Partnership Agreement, the applicable law is the Partnership Act 1890.  We would therefore recommend that you take the pre-emptive steps to get a contract between you and your business partner(s) rather than being bound by a law that is now 127 years old!  If you decide to set up a company limited by shares, we would recommend a Shareholders’ to protect your business and your respective rights and obligations as shareholders.   


Getting the right and adequate insurance for your business will be one of the most, if not the most, important fundamental when setting up your business. 

Insuring adequately your business from the outset will ensure that you and your business are covered against any claims from customers, suppliers or even your employees, limiting and covering your public liability, employer’s liability and so on.  

Business Premises:

Start-ups don’t always require renting out premises from day 1.  And for a fact, today’s most profitable companies such as Amazon, Apple or Google started off from their funders’ garage.  But whether you are thinking of expanding or that you require business premises to carry out your business, we would recommend that you seek legal advice in relation to your commercial lease to avoid surprises as to any increase in rent, requirements for planning permissions or even the condition of the premises.

Protecting your brand:

Starting a business is also building a business around an idea and develop one’s brand and value.  A brand is for most customers, the guarantee of that company’s quality, that one has worked hard to develop and establish.  In order to protect your business and its brand, we would strongly advise that you take all necessary steps to protect your business’s Intellectual Property Rights: registering trademarks, designs, patents for instance and asserting your ownership against any third party who may want to use, abuse or steal them.  By taking steps to protect and register your Intellectual Property Rights, it will be much easier to assert your ownership over these, whenever it will become necessary.  Additionally, you will also be able to grant licences to use your Intellectual Property Rights, franchise them or even sell them at a later date.


Service contracts / Terms & Conditions:

Whether you supply goods or services, a contract with your customers and suppliers will be crucial to limit your business’ liability and ensure that all parties are aware of their respective obligations.  You do not want to skip this Fundamental and for example, you do not want to be left out without remedies against an unsatisfied or dishonest customer. 

Employment Contracts & Pensions:

Finally, if you hire employees, you will require Employment Contracts to comply with Employment Law, your employees’ rights and make sure that your business abides by any statutory obligations.  Employment Contracts are also a protection for your business with regard to post-termination restrictive covenants or confidentiality clauses.

Small businesses’ requirements to set up a pension scheme for their employees will also become compulsory from April 2017, don’t forget about it! 

If you need further advice, please do not hesitate to contact us for further advice.

Identity Theft - How to Stop Others from Stealing your Brand

My friend received a letter from a lawyer earlier this year demanding that he stopped trading under his business name. My friend is a food entrepreneur and has worked very hard to establish a unique and fast-growing business in London.

His business philosophy is simple. Serve good food, good drinks and create a vibrant and friendly atmosphere where people can eat and hang-out. He started out on his own in a trendy part of London and now has branches in various parts of the city. Apart from his winning business philosophy, his business had a winning brand! His logo was smart and simple. The name was catchy, easy to remember and describing the essence of the business.

Unbeknownst to my friend, another business opened up in London with a similar name and brand.

My friend tried to fight the other business but in the end decided it was not worth the cost of the legal battle his competitor was threatening.

In short, my friend should have protected his business name by trade marking his brand.

How can you stop this from happening to you?

You must register your trade mark!

As business owners, we work very hard at building our brand. However, we should also ensure that we protect our brand.

According to the Institute of Trade Mark Attorneys, a trade mark is "any sign capable of graphical representation which can distinguish the goods and services of one undertaking from those of another". It can inlcude words, names, signatures, logos, numbers, signs and designs.

In the UK, trade marks are registered on a first come first served basis. It is important therefore to register your trade mark in the early stages or as part of the product or business launch.

The cost of registering your trade mark is a fraction of the cost of the legal action that may ensue as a result of unauthorised use of your brand.

If you are already trading and have not registered your trade mark as of yet, we advise that you do so as soon as possible to protect your brand and ensure continued business success.

Use a Professional

I recommend that you seek the advice of a legal professional to protect your brand. At Posada & Co, we can help you from the outset by:

  • Conducting the necessary searches to establish whether you can register yur brand;
  • Advising you on the right classes for your trade mark;
  • Preparing the trade mark application;
  • Advising you on any issues that may arise as a result of your application (e.g. someone may object to your application).

For assistance with protecting your brand, contact our Commercial team at Posada & Co.