Key legal considerations for businesses

Legal: Chloe Vertigen, Birkett Long

 Importantly, once established, there are some legal areas that businesses should review regularly…

Contracts

Business relationships are ever-changing – the context or requirements of a particular deal can change significantly over a year, and laws can change. As such, it is always good practice to periodically review your supplier and customer contracts, and consider:

• Do your contracts reflect the relationship you have with your customer/supplier? If not, the contract needs to be updated so that you aren’t tied into an unsuitable agreement.
• How long is left on your contract? Is it still in force and valid? If the contract has expired, there could be a grey area about what terms apply to any ongoing relationship. This ambiguity can result in increased costs and time spent debating the terms of the agreement if the relationship breaks down.

Your business

As your business grows, you may bring more directors and shareholders into the fold, and you should regularly check that your business documents are updated with any organisational changes.

• Do your articles of association still work? Companies often adopt model articles when they first incorporate, as these require no amendments or drafting. However, they are not always suitable and should be regularly reviewed to ensure they reflect the needs of your company.
• Have you got a shareholders’ agreement in place? It’s good to have a written agreement to regulate the relationship between shareholders. This can set out, for example, what happens if they fall out, if a shareholder dies, when dividends are declared, and any restrictions.

Your assets: intellectual property

Your intellectual property (IP) is a commercial asset. Being able to exploit your IP can help to protect your business and generate revenue.

• Should you get a trademark? Having a trademark gives you the right to use it exclusively for the goods/services it is registered for, and the right to stop others from using that mark or others which are confusingly similar. Going through the application process sometimes highlights issues with a business name. If you are unsure as to the name you have chosen – and whether others already use it – then undertaking pre-filing searches is prudent.
• You have a trademark, what now? Once you have your trademark registration, you should be actively using it. From time to time, you might notice other companies using a similar mark to yours, in which case you may be able to ask them to stop using it. You may also receive notices advising you that another company or person is looking to register a similar trademark. You can pro-actively supplement these occasional notices with a trademark-watching service, which lets you know what other companies in your field are filing.