business
SURVIVINGTHECREDITCRUNCH–
TIPSFORSMALLBUSINESSES (Part2)
WORDS: SHEILA FRASER
In the last edition of North Magazine, I looked at the impact the
credit crunch was having on small businesses and gave you
my top survival tips. In the light of the response to the article,
I thought it would be worthwhile staying with this topic for the
current edition. This time, I want to focus more specifically on
three issues which should form part of any “health check”
undertaken by a small business in these turbulent times.
1:ReviewYourStructure–ShouldYou anybusinesscontemplatingchangingits
Incorporate? structureshouldseektheadviceofits
accountantandsolicitor.
Manybusinessesstartassoletradersoras
apartnership.Itisrelativelyeasytostarta 2:ReviewYourContracts/Termsof
businessusingeitherstructure.Thereare Business–AreTheyUpToDate?
disadvantages,however,includingthe
personalliabilityofthesoletrader,or Whetheryourbusinessinvolvesthesaleof yourIPandthentotakeappropriatesteps
partners,asthecasemaybe.Inaddition,it goodsorthesupplyofservices,itis toprotectandexploitit.Ifyoudonotdo
isquitecommonforpartnershipstotrade essentialthatyouobtainaprofessionally so,youruntheriskofcompetitorstaking
withouteverenteringintoaformal draftedcontractorstandardtermsof advantageofthisandexploitingand
partnershipagreement.Thiscanproveto business.Withoutthis,youhavevirtually benefitingfromyourIP.Togainabasic
behighlyriskyandcanleaveindividual noprotectionagainstbadorunscrupulous understandingofIPreadtheguidefor
partnersseriouslyexposedintheeventof customers.Awrittencontractsetsoutwhat businessandenterprisefoundontheUK
adisputearisingbetweenthepartners,or goodsorservicesyouwillprovideforthe IntellectualPropertyOfficewebsite
betweenthepartnershipandathirdparty. customer,howmuchyouwillbepaidfor (www.ipo.gov.uk).Forspecificadviceon
Itgoeswithoutsayingthatevery theseandwhenandhowpaymentwillbe protectingtheIPofyourbusiness,seekthe
partnershipshouldhaveawritten made.Itwillalsoincludenumerousterms adviceofasolicitorwithexperienceinthis
partnershipagreementwhichisdraftedby andconditionstoprotectyourinterests areaoflaw.
asuitablyqualifiedandexperienced suchasaninterestclauseandprovisionsfor
solicitor.Thepartnershipagreementshould disputeresolution.Ifyouareadvertisingor Tosurviveinthecurrenteconomicclimate,
bereviewedperiodicallytoensurethatitis tradingontheInternet,thereareawide everybusiness,largeandsmall,needstobe
uptodatebothlegallyandintermsofthe rangeofadditionalissueswhichrequireto proactiveinprotectingitsinterests,
currentactivitiesofthebusiness. beconsideredtoprotectyourinterest. reviewingitsoperationandseizingany
Furthermore,soletradersandpartnerships opportunitieswhicharise.
shouldgivecarefulconsiderationtotheir 3:ReviewYourIntellectualProperty–
choiceofstructureonafairlyregularbasis AreYourAssetsProtected? SheilaFraserisanAssociateinStronachs’
andshouldconsiderwhethertheyshould Invernessoffice(tel:01463713225).
converttoalimitedliabilitypartnership(LLP) IntellectualProperty(IP)includespatents, Sheadvisesclientsinareasofcommercial
orincorporateasacompany.BothLLPsand trademarks,copyrightanddesigns.Many lawincludingproperty,contracts,intellectual
limitedcompaniesoffertheprotectionof smallbusinessesmisunderstandIPand propertyandpartnerships.Shehasa
limitedliability.Thereare,however,financial consequentlyoverlookit.Yetitiswidely particularinterestinhealthcareandrelated
(includingtax)andotherimplications.The recognisedthatIPcanhavesignificant businesses. a73
transferofanexistingbusinesstoanew value,eveninasmallbusiness.Itis
structureneedsparticularcare.Therefore thereforeimportantfirstofalltoidentify Email: sheila.fraser@stronachs.com
thenorthmagazine 39
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