Commercial Law – What you need to know

Whether you’re an experienced entrepreneur, a small business owner or looking to begin a new venture, understanding commercial law is crucial. Knowing the laws and regulations that apply to your business helps ensure compliance, reducing the risk of fines, penalties, and legal disputes.

We don’t expect every business owner to understand anything and everything there is to know, but to help you along the way, we have put together a series of our most frequently asked questions along with answers from our experts.

So, you have a brilliant idea, the brains and money to make it happen and can see your millions on the horizon, but you’re not sure what happens next.

To get things off the ground and ensure all things legal are taken care of, the experts at Backhouse have created a comprehensive guide that provides information on what you need to think about, what you need to do and when you need to do it. Click here to access the free downloadable guide.

As a limited company the business is an entity itself and the contracts, assets, liabilities, profits and losses, sit within the business. The legal paperwork and reporting obligations are more complicated, but you have a greater degree of protection from the limited liability if things should go wrong. There are also certain agreements and contracts that any business owner should have in place to protect the business:

• Shareholders Agreements – a contract entered into between all shareholders of a company and often the company itself, to govern how the shareholders may interact with each other and how decisions regarding the company may be made. Shareholder agreements can provide for many eventualities within a company, and we would always advise putting these in place from day one. Even if you are setting up a business with a close friend or family member it is essential to agree everything upfront so that should a disagreement ever happen, both parties’ assets are fully protected.
• Partnership Agreements – a written agreement between partners setting out how they must interact, and how the partnership will operate. Much like an employment contract, you can set out restrictions for all partners in the business, preventing them from competing, soliciting clients/customers or poaching staff members. Without a formal Partnership Agreement, simple partnerships are automatically governed by the Partnership Act 1890.
• Terms & Conditions – These could be anything from standard Terms and Conditions (“T&Cs”) for the customer to sign to confirm the agreement, right up to complex, bespoke contractual agreements between your Company and the customer.

Business contracts and related terms and conditions are a fundamental part of your relationship with your customers.  Whether you have bespoke contracts for one-off pieces of work or general terms and conditions that apply to all your customers, it is extremely important to get them right.

At the most basic level, professionally drafted contracts or standard terms of business lay out what you agree to provide as a service or goods for your customers. If you don’t have a legal contract, you run the risk of not being paid by your customers!

For more information on what should be included in your business contracts, terms and conditions, and how we can assist you, visit our dedicated page here on our website.

A Joint Venture (JV) is a commercial opportunity pursued jointly by two separate businesses. You can have contractual joint ventures, or a new company may be created for a particular purpose.

Joint ventures can be formed through a few different structures. These include;

• Company Limited by Shares (CLS)
• Limited Partnership (LP)
• Limited Liability Partnership (LLP)

There are several reasons to enter into a joint venture, but whatever the circumstance, you must do your research to ensure you fully understand the pros and cons of what you are entering into and how you may be affected if something goes wrong. Our experts can advise you and help you to understand any potential implications that you should be aware of.

A share purchase or share sale agreement is a legal contract that sets out the terms and conditions under which shares in a company are bought and sold. This type of agreement is commonly used in mergers and acquisitions, private equity transactions, and other corporate finance activities. The agreement provides a framework that governs the entire transaction and protects the interests of both parties involved. There are key components that must be included in the agreement so it’s always best to seek legal advice to ensure nothing is missed.

An asset purchase or asset sale agreement is a legal contract used to transfer ownership of specific assets from a seller to a buyer. Unlike a share purchase/sale agreement, an asset purchase/sale agreement involves the transfer of individual assets and liabilities. This type of agreement is common in mergers and acquisitions, where a buyer may prefer to acquire only certain parts of a business rather than the entire company.

However, just like a share purchase or share sale agreement, there are important elements that must be included in the agreement and our team can guide you through all the stages and legal requirements giving you peace of mind and help to ensure no surprises or liabilities emerge in the future.

If you need commercial law advice, our team of experts are here to help. We offer help and advice on a range of legal issues and services within commercial law as well as our Business Law Platinum Package, designed to help protect you from any employment or business law-related problems. To book a free initial consultation contact a member of our legal team today.

Tel:          01245 893400
Email:     info@backhouse-solicitors.co.uk
Visit:       17 Duke Street, Chelmsford, CM1 1JU
Or send us a message through the Contact Us page on this website.