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Dotting i's and crossing t's

Community Manager

Dotting i's and crossing t's

Starting a business can be a legal minefield, but getting the right legal advice can save time and money in the long-run. Everything from insurance, to IT licences, Intellectual Property Rights (IPRs) and tax liabilities need to be accounted for, plus much more besides. 

 

No wonder so many fledgling businesses encounter a hitch sooner or later.

Suzanne Rab is a barrister at Serle Chambers in London, with vast experience across commercial law, including in the new economy and regulated sectors.

 

Untitled design (40).pngShe says, “Lawyers should add value. They are there to make you aware of the risks of not operating in compliance with the law, but they should also help find options to make your idea thrive.”

 

As Suzanne is so well acquainted with the legal challenges experienced by young businesses, we asked her for some legal tips for entrepreneurs.

 

“Don’t break the law.”

It sounds obvious, but from the outset it’s important to know what you are doing is legally compliant. The precautions you need to take depend on the business you are operating.

 

In financial services, for example, it may be you can do some things without obtaining authorisation from a regulator such as the Financial Conduct Authority (FCA), but you should check you have the right permissions for your business at the outset and as you expand.

 

There may be other things you need to consider, such as data protection registrations, licences or other legal clearances – in every country where you propose to do business. Knowing what you can do without breaking the law, whatever your sector, is essential.

 

“Factor legal costs into your business plan.”

Small businesses don’t always factor legal costs into their business plans, often because legal expenses can be seen as overheads or tedious, and not as exciting as things like the marketing spend. If you are found to have been breaking the law, or your legal agreements are not watertight, there will be financial implications down the line.

 

It might be tempting to use templates from the internet as a model for commercial contracts, and to make a few changes yourself. But if you end up in a dispute with another party, how sure can you be that you are adequately protected? Give legal strategy the investment it deserves.

 

“Consider a specialist advisor.”

A generalist approach to legal requirements might appear to save money, but specialisation can be important. Getting someone who understands your business and knows your area is worth its weight in gold.

 

A specialist can give tailored and up-to-date advice about what is happening in areas most relevant to you. Often this will be required for firms operating in regulated sectors, firms dealing with personal information where data protection may be an issue, or those dealing with IPRs including trademarks and patents. Advice from a specialist might also help identify opportunities to fund business growth, such as public grants for SMEs.

 

“Read up on your legal responsibilities at the start.”

Some questions from small business owners suggest they might not be paying enough attention to working within the law until they have been operating for some time. For example, an entrepreneur might get in touch with a ‘quick query’, which turns out to be “Do I need to get a licence from the regulator?” In fact, that can be quite an involved query, and an important one, which may take some time to resolve as the answer will usually be fact-specific.

 

Another common scenario is a small business owner who doesn’t realise that competition law applies to them, as well as huge conglomerates. Competition law does put greater responsibilities on dominant companies, but in some important areas the rules are essentially the same. Firms can’t, regardless of market power, fix prices or allocate markets with their competitors.

 

If you have a legal question you can always do some initial research to help decide whether you need to consult an expert. Chambers of Commerce are good sources of advice.

 

“Look for legal advice that drives business objectives and is value-enhancing.”

The best lawyers are commercial, savvy and aren’t just there to give legal advice. At the end of the day, you are there to operate a profitable business and don’t need a straitjacket. Business objectives should be important to your legal advisor, and it helps if they can think outside the box too.

 

Many thanks to Suzanne for sharing her expertise with the VOOM Pioneers community.

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