Woolley & Co E-Zine October 2006
Tips and ideas for keeping your business on the right side of the law


Welcome to the October ezine from Woolley & Co.  This month there’s a quick round up of recent legal changes affecting all businesses and some pointers on contracts, copyright and shareholder agreements written in response to many recent enquiries we’ve had from clients and ezine readers.

Andrew Woolley
Andrew Woolley, Senior Partner, Woolley & Co

OCTOBER 1ST LAW CHANGES IN BRIEF

A raft of new and amended legislation came into force on 1 October, relating to discrimination in the workplace, the minimum wage, fire safety and maternity rights. Here's a quick summary of the main changes that have taken effect.

  1. The National Minimum Wage (NMW) has increased for all adults and younger workers. Details are available on the DTI website.

  2. Under the Regulatory Reform (Fire Safety) Order 2005, the requirement for businesses to have a fire certificate has been removed, and more emphasis has been placed on fire risk assessment.  At least with a certificate you knew whether you were complying, risk assessment puts more onus on the business owner and makes it less straight-forward to measure whether you comply.

  3. Businesses can no longer discriminate against staff on the grounds of age, under the Employment Equality (Age) Regulations 2006.  One of the many impacts of the age rules is that employees cannot be forced to retire before the age of 65.

  4. Under the Work and Families Act, statutory maternity and adoption leave has been extended from six to nine months for mothers whose babies are due on or after 1 April 2007.  The qualifying criteria for additional maternity leave have been removed, so that all mothers will be able to take up to one year off work regardless of their length of service. The notice period that mothers must give to their employers if they change their return-to-work dates has been increased from 28 days to eight weeks.
CONTRACTS – THE MAIN POINTS TO INCLUDE

We are often asked, what are the main things to have in my contract?  Here’s a list of the key elements of any business contract.  Of course as always with these things the devil is in the detail.  Why not check your business contract against this checklist?

Does your contract contain…

  • A limit on liability?
  • An explanation of exactly what you are going to do for the customer?
  • Details of what you will be paid and when?
  • Details of what you’ll do if you are not paid?
  • An explanation of how you can get out of the contract if (e.g.) the customer becomes unreasonable?
  • Clarification on which country’s laws apply?
  • Details of delivery including who is responsible for it?

Businesses try to operate without format T & Cs at their peril.  Small and start up companies sometimes avoid them, mistakenly because they think that it will cost a fortune to have a standard contract drawn up.  This need not be the case.  At Woolley & Co we offer fixed fee agreements from £450 plus VAT and will review any contract you are being asked to sign for just £250 plus VAT.

YOUR QUESTIONS ANSWERED

This last month we seemed to have faced a rush of similar questions about copyright and shareholder issues.  Hopefully these two questions and answers will provide useful pointers on commonly faced issues.

Q.  I am getting a website developer to make a site for my business so that we can start selling on-line. I've sent them various photos from other sites which will be useful.  A friend told me I had to be careful of copyright issues--what are they (and what about my site: will it be protected)?

A.  For once "A. Friend" is right!  You need to be wary of:

  • breaching copyright of the photographers who took the photos you've taken from the Web
  • breaching the copyright (or maybe the viewing terms) of the sites you've taken them from
  • making sure that copyright in the site you get developed is transferred to you from the developer (for a creator of such a thing automatically owns the copyright in it--copyright is the right to stop something being copied etc).

But hopefully your contract with the developer will set all this out. You do have a web development agreement, don't you? It is an essential in our view. This is a big purchase for your business.

Your site will be protected by copyright. People may not lawfully copy it's wording, it's photos, logos and its general look e,g, colours, layout.  There is more in this Copyright article on our website. 

Please bear in mind this is a very general comment, copyright is a complex and very detailed subject. Do take advice if unsure.

Q.  I am a shareholder in a small manufacturing business.  There’s myself and another Directory / Shareholder and we want to formalise an agreement between us.  Is a 50:50 shareholding the best way to proceed?

A. 
Almost always not. Indeed it can cause many problems.  You can quickly get into deadlock on important issues about which you'll disagree. I know, you've been friends since school, she's a great girl, you never argue. Trust me, you will when running a company where your livelihoods are at stake especially when times are hard as they doubtless will be.

A properly drawn shareholders agreement can foresee and prevent such issues by setting out things which have to be agreed and by what method. It should probably also provide for mediation in the event of a dispute. I emphasised the words "properly drawn" as many that we see are inadequate and appear not to have been drawn up by people who have real experience of the issues that may arise. The danger is that you might think you're covered if you've got an agreement, but is it any good?

The article on shareholder agreements on our website highlights some of the things you should look out for.

To find out more about these and other legal issues visit the Woolley & Co website at www.business-lawfirm.co.uk/. The site also contains articles and back copies of our E-zine – which might be a useful place to start if you have a legal problem you need help with.

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