The new year is a perfect time to tackle the legal loose ends in a business in order to start the year with a clean slate and a fresh start! In this episode, we run through the top 7 areas of focus in getting legals in any organisation ship shape for the year to come.
Episode Highlights:
- Employees and contractors
- Intellectual Property
- Clients
- Funding
- Privacy Laws
- Business Structure
- Agreements with Business Partners
Employees and contractors
Check that all of your employees and contractors are signed up to proper and current agreements. Ensure that your employment and contractor templates are up to date with current legislation.
Re-check the agreements that are in place to ensure that they include protection against employees taking any confidential information of your business or your clients. And ensure you have strong non-solicitation clauses in place to protect against staff walking off with your client base!
Ensure that any workers you consider to be “contractors” have been correctly classified. Sometimes the initial relationship with a worker might be a contracting relationship, but over time can develop into something that looks more like employment. For example, if you pay your worker an hourly rate, your relationship might actually be one of employment. See here and here for articles we have written on this issue.
Make sure you have a solid process for documenting employee issues such as warnings. Termination of staff can be a tricky area, so having a process in place to ensure that you are capturing a thorough paper trail is extremely important.
Intellectual Property
Check whether you have protected any brands that you are using regularly – for example your business name, or any product names that you spend money on marketing.
Google search your name, and check whether any of your competitors might be using your name as a sponsored google adword, stealing your traffic. See here and here for articles we have written on this issue.
Re-check your agreements with employees, contractors and suppliers to ensure that you are the owner of any intellectual property rights for work that is created for you.
Clients
Check your client agreements to ensure they are reflective of your current business practices, and up to date with current legislation. For example we still see some terms and conditions documents from time to time that haven’t been updated since the changes to the Competition and Consumer Act and the new Personal Property Securities Act legislation. New unfair contracts legislation came into effect in November 2016, so your client agreements should be checked to ensure that they are enforceable under the new regime. On the flip side, if you are a small business you should check whether your obligations under agreements would now be considered unfair and unenforceable – we can help you with all of this! Also, you should consider if you have any security interests, and if so protect that interest by registering it on the Personal Property Securities Register.
Check how your client terms and conditions document ties in with any proposals or quotes that you provide. We often see cases where businesses have forgotten to link these documents together, thereby losing some of the protection that their terms and conditions documents would otherwise provide.
Check whether your client agreements clearly provide you rights to charge interest on late payment, and require that your clients pay for any enforcement costs you might suffer in chasing up their late payments. It is much easier to levy these charges if it is clear in your client terms that you have the right to do this.
Check your process for ensuring your clients are well trained in the payment of their accounts with you. Review the process you are following, the timing between follow up calls and letters, and the content of letters.
Now is the time to get tough if you have some problem payers, so that you can start the year afresh!
Funding
Review your balance sheet and check if there are any shareholder or director loans in place.
If the business owes you money, check that you are a secured creditor of the business and have all of the right agreements and PPSR registrations in place so that you rank higher in priority to other creditors of the business. See here and here for articles we have written on this issue.
If you owe the business money, ensure you have relevant agreements in place in case you are ever subjected to an audit.
Privacy Laws
Are you compliant with the new privacy laws? Now is the perfect time to check your privacy policy.
Business Structure
Does it suit where you are now, and where your business is aiming to be in the future?
Take the opportunity to reconsider whether your current business structure is the right structure for you to be operating out of, in terms of asset protection for the business owners, and the optimal structure for the future plans of the business.
For example if you are thinking of selling in the next 5 –10 years, do you have the right structure in place? Restructuring for a sale should ideally be bedded down years before a sale, so it’s never too early to start planning forward. Businesses can grow very quickly, and what might have been a suitable business structure for you last year, might not fit your current risk exposure or future business plans.
Agreements with Business Partners
Review your agreements with any partners in your business – do you have clear guidelines on how decisions are made, how disputes will be dealt with, and how each party can exit the business? And if you already have these things in place, take the time to do a quick check to ensure that they properly reflect where your business currently is today.
I know this seems like a long list, so if you want some assistance in this review, we would be only too happy to help.
We can assist either in reviewing individual documents, or through our “Annual Legal Review” process in which we review key areas of your business like the ones above, to help identify areas of potential risk. If you are interested in finding out more about our legal review services, contact us on 02 8006 0830 or pop us an email to [email protected].
