Benefits of Working With a Solicitor to Set Up a New Business
Launching a new venture can be hugely exciting. But establishing the optimal trading structure, customising contractual terms, and creating a bespoke set of association documents can be time-consuming.
The regulatory framework is complex, so legal advice from day one is the best possible way to ensure you’ve dotted all your I’s and crossed all your T’s.
Today we’ll explains why an early consultation with an experienced solicitor is key to ironing out potential teething problems and how a skilled legal adviser might even improve your initial start-up investment prospects!
Essential Legal Advice When Setting Up a New Company
One of the stressors for new business owners is the myriad of decisions that must be made.
Investigating financing opportunities, analysing legal implications, determining whether offered terms are reasonable, all while looking to establish a customer base and build branding and reputation.
A solicitor specialising in business law does much more than step in when you have a dispute or legal challenge.
We assist clients with:
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- Considering the tax implications of varying business models.
- Advice on the right time to start your first trading period.
- Negotiating lending terms for start-up capital investments.
Depending on the nature of your business it may also be necessary to set up contracts for supply or procurement, in which case you’ll need to look at product liabilities, insurance coverage, and finessing your marketing to comply with statutory industry regulations.
Getting it wrong at the early stages can be disastrous even for outstanding business concepts, so we always recommend speaking with a solicitor right from the beginning to ensure your launch runs smoothly.
Advantages of Legal Support When Launching a New Business Venture
There are multiple elements of establishing a new enterprise that involve contracts and agreements, all of which benefit from an astute legal eye to point out issues or recommend amendments.
For example:
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- Building leases
- Client or supplier contracts
- Employment offers
- Shareholder agreements
Any documents that comprise an agreement between two businesses should be fully reviewed and negotiated to identify clauses or terms that conflict with your company objectives.
Partnership agreements or shareholder contracts must outline the financial contributions of each party, ownership proportion, and the anticipated returns.
Getting these agreements spot-on is advantageous to support your position as the company grows, avoid conflict, and secure your status as a new start-up with a solid grounding supported by an experienced legal team.
The Significance of Adequate Insurance
Insurance coverage is necessary to protect your business from multiple risks and potential exposures that could dislodge a fledgling business before it has a chance to gain market share.
With policies ranging from public indemnity, employer’s insurance, product liability, legal indemnity, building coverage and many more besides, selecting insurance without spending over and above your budget can make a big impact.
Our business solicitors offer advice to identify your most significant risks and decide which exposures are worth guarding against, such as:
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- Employee damages or accidents.
- Protection if a product injures somebody.
- Safeguarding your assets, premises and visitors.
Most new businesses will look to minimise initial costs, so a legal consultant can recommend the coverage worth investing in and those you can afford to postpone.
Securing Funding for a New Business Proposition
We’ve mentioned investment, and it’s often a space that will make or break a new company on the brink of a launch date.
External financing relies on robust incorporation or partnership documents, whether through a private investor, a bank, crowdfunding, or venture capitalist.
It can be tough to secure investment without legally valid documentation that meets investor expectations, so all the foundational documents must pass inspection.
There are endless reasons why accurate and complete incorporation documents matter, but as a few examples:
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- Venture capitalists will not invest in new businesses without comprehensive corporate records and incorporation documents.
- Poorly constructed documents prepared from templates can expose founders to losing shares or control over the company.
- Financial negotiations hinge on the abilities of the business owners to confer and handle requests while fostering positive relationships. Third-party financiers are proficient at making deals to their benefit, so having a legally aware approach can be meaningful for the business’s long-term success.
Here at The Law Firm Group, we never recommend using standard incorporation documents for these reasons.
While it’s possible to download a template at a very low cost or use standardised paperwork available through Companies House, this method can be costly and pose vulnerabilities later down the line.
Guidance to Protect Intellectual Property
Intellectual property (IP) can present a bit of a grey area but covers some of those proprietary designs and product engineering that is unique to your new business idea:
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- Artwork and literary pieces
- Logos, symbols, names and graphics
- Fresh inventions
- Designs
Ensuring you understand how IP ownership works is important, particularly if you commission designers or agencies to create business branding.
Contracts must state your ownership of the IP, or permitted legal usage rights, to avoid the prospect of legal challenges, often when the new business has reached a certain level of success.
It is also crucial to protect IP from the competition, especially for new businesses that have innovative creations and designs, which can be vulnerable to things like copying trading names, replicating a logo, or reverse engineering a product.
Finding Independent Legal Support to Set Up a New Business
As we’ve seen, there are numerous benefits of having professional advice at every stage of setting up a new business – from crafting your trading documents to entering into contractual agreements.
As your commercial solicitors, our role is to identify potential risks, analyse the terms of each contract, and help you make informed decisions about the best ways to proceed.
For more advice about creating a future-proof trading structure or addressing challenges you’ve faced running a start-up company, please get in touch with The Law Firm Group at your convenience for professional, impartial and friendly advice.