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Don’t get caught out by the law


“Don’t disregard legal advice; DASLS urges SMEs to be legally prepared


SMEs across the South West are being urged to take professional legal advice to make sure their business is covered for any potential issues. The Devon and Somerset Law


Society (DASLS) suggests that, in the wake of Brexit and with continuing uncertainty about the economy, now is a crucial time for smaller businesses to make sure they are fighting fit in terms of business law. DASLS Executive Director Tony


Steiner (pictured) said: “Many small to medium-sized businesses set up without considering taking legal advice, an oversight that can come back to bite them should something go awry months, if not years, down the line. “It is easy to understand how


this happens, as unlike larger businesses that often have dedicated departments to make sure legal advice is sought, smaller SMEs don’t always have the time or resources to find out what they need to know, even though they are putting their business at risk by not doing so.” A small or medium-sized


enterprise as defined by the European Commission is a business


24 Chamber Profile July/August 2017


or company with fewer than 250 employees. In the South West, as many as 90% of businesses fall into this category; Devon County Council reports that a quarter of businesses in Devon are not registered to pay VAT or employ staff. Whether medium, small or even micro, too many of these businesses are overlooking the need for business law, leaving themselves wide open to potential legal problems. Tony agrees that there is also an


issue with smaller businesses shying away because of the assumed high costs of seeking legal advice. But, he says, it is infinitely better to at least make a start. “Any business owner can have a


conversation with a solicitor who will outline the issues they need to consider. An initial meeting should be affordable, and indeed some solicitors will offer a fixed fee service. The business owner can then decide what to take further with the solicitor – and it’s preferable to take small steps rather than do nothing at all.” The best time to sort out the


legal aspects of a company is at the outset, when a business is being set up.


This way the operation will be


covered from the start of trading. However, often so much energy is put into getting a business up and running that various aspects considered less critical, including law, are put on the back burner – and sometimes forgotten about. Conceivable pitfalls from a failure to take legal advice include:


• Not establishing the correct legal structure for a company, which can result in personal liability issues


• Having weak employment contracts that could lead to litigation


• Not setting up copyright, patents or trademarks, meaning a business is open to intellectual property theft


• Leaving customer data unprotected on the company website. The digital environment overall is a major concern, with online libel, for example, becoming an increasingly common issue


• Failing to have a shareholder agreement, which makes it hard to sell a company later on


• Not establishing correctly drawn up terms of trading, which can leave a sole trader high and dry if a client refuses to pay.


Sarah Cressall, founder of South West-based creative play franchise business, Creation Station said: “For me it was crucial to take legal advice from the start - I knew I was going to franchise, so the long term structure of the business was important. Terms and conditions, liability, patents and managing risk; knowing that these are all legally covered gives peace of mind as well as assurance to customers and staff. “As a business grows, business


owners become ever more aware of what can go wrong, so managing risks is essential. It’s vital to understand that the law can change, too, so it’s important to take ongoing advice.” DASLS can help SMEs requiring


legal advice source a local solicitor or they can visit their website to access a list of members with the relevant skills.”


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