Huntley Legal's Blog

An increasing percentage of startup businesses are providing their service through a mobile app or software platform.

However, many people are vague about how to protect their intellectual property in the systems and software they build.

For example, you might be wondering if you can patent your software. In the UK and Europe, the current answer is usually no.

The most applicable protection is copyright, because (as you might be surprised to discover) software is treated as a literary work!

The protection for literary works was obviously designed for books, and doesn’t apply in exactly the same way for software and computer programs. The problem is that software isn’t always as simple as a printed publication on paper.

I often speak to long-term shareholders and business owners/managers who don’t really understand what dividends really are or know their liabilities around them.

People often loosely think of dividends as a way for owners and shareholders to get money out of the business, perhaps because this can be particularly tax-efficient for start-ups.

However, company dividends can also be quite a technical area, with terrible consequences if you do things wrong, such as when shareholders get too greedy or the Board is too generous.

There are specific issues to consider if your small company is owned by you and your family members, or even by a group of people who aren’t related. They also apply when there are a small number of people who invested significantly at an early stage.

How do you define a small company? For the purposes of this article, there is no magic number, but let’s say it’s less than six shareholders (so it could be more or less staff).

In this situation, you have to talk about things that people don’t often like discussing. Here are some of them.

“Battle of the forms” is a long-established description of what happens when a customer and supplier start a new business relationship and attempt to form the contract.

Often, each party wants the contract to work on their own standard terms, and this can result in all sorts of silliness. Admittedly, some of this silliness is caused by the legal authorities defining the way you can identify whether a contract is or not is formed, and on what terms. This article explains more.

Are you a supplier and you want to get out of a contract with a customer?

Let’s assume there is no underlying dispute, and no controversial reason why you want to leave. Maybe you are moving into a different line of business or need to be free to deal with a different set of clients. It’s more complicated if you want to get out of the contract because of the customer’s bad behaviour (see links below).

This article explains how to prepare and manage your exit as best as possible, to reduce risks and the inconvenience that might arise if you do things clumsily or in haste.

The start of a new year is a good time to stop and plan your legals for the year ahead. Also, now that we are edging towards Brexit, it’s a good time to identify any issues in your contracts that might be affected. Here are some practical suggestions for you to consider.

We recently wrote about everyday practices that will hurt the sale of your business. This time, we build on that by looking at issues to consider when preparing to sell.

None of these practices are outrageous in themselves. They are simple little drifts away from best practice. In real life, they happen all the time.

Because of that, you probably take them for granted. You wouldn’t even think about them in the context of selling your business, or your perception of its value.

BUT the buyer’s due diligence WILL pick up on them. And then there is a risk the buyer will:

• Walk away from the deal
• Reduce the price they are willing to pay
• Make you jump through lots of hoops to address each issue before completion

An early-stage business often looks for introductions to significant investors and potential clients.

The first source of investment might be to turn to friends and family, or your own credit cards. But, at some point, you might want to seek funding from strangers.

If you sell B2B services and you’re targeting corporate clients, you might try to talk to senior decision-makers there. But they’re busy people who are hassled by suppliers all the time. As such, they are unlikely to take your call.

It seems the world is full of suave and sophisticated business people who are willing to connect you to the right individuals... for a fee.

They are typically equipped with their own agreement for you to sign. It might look like a low-key 1- to 3-page letter, and they’ll tell you “there are no legal fees to set up the arrangement”.

I have two groups of clients who bring me these agreements:

Bootstrapping is quite common for startups, entrepreneurs and fledgling businesses who have little or no funds. They try to avoid spending while they get their business established. Often, they can’t get investment until they reach a certain point, so they want to get by ‘on fresh air’ until the money comes in.

This is perfectly understandable, and can be wise, but trying to save money on legal matters early on can lead to unhappy outcomes in future.

Things people do in an attempt to save money...