FAQ – Business Law

 

FAQ - Business Law

What types of business entities exist, and which should I choose?
There are a whole range of business entities for a whole range of circumstances. The most common types are:
  • Sole trader (where you are self-employed, and your business has no legal identity separate to you)
  • Limited liability partnership (a business consisting of two or more persons registered into Companies House)
  • Limited liability company (where the trade of the company and any debts it may incur are deemed to be its own)
Which one you choose will depend on the nature and circumstances of your business.
What are shares and do I need to register shareholders?
If you own a share in a company, it means that you have exchanged money for ownership of part of that company, how much of the company you own is determined by how many shares you own relative to the total number of shares that the company has. As a shareholder, you are entitled to profits relative to your stake in the company – if you own 20% of the shares in the company, then you are entitled to 20% of its profits. Owning shares in a company may mean that you also have the right to vote at general meetings, though certain types of shares can be allocated different amounts of voting rights. You do need to keep a register containing all your shareholders and shareholdings. This must include the shareholder’s name, contact address, number and types of shares they hold, the amount paid or agreed to be paid on each share, the date that they became a member of the company, and the date when they ceased to be a shareholder, if necessary.
What is a shareholders’ agreement?
A shareholders’ agreement is a contract entered into by the shareholders of a company, which sets out agreed matters between them, such as how shares will be transferred, how they will vote, non-compete restrictions and other personal rights and obligations. It is important to have a shareholders’ agreement so that disputes within the company can be resolved via a process included in the agreement or are resolved easily because the agreement sets out the answer to the dispute. It can also protect shareholders as well as the company. If you are looking to sign or create a shareholders’ agreement, we recommend getting in contact with us. Stella Maris Solicitors LLP can negotiate and draft terms of the agreement on your behalf so that your business can run as smoothly as possible.
What is intellectual property law and how does it affect my business?
Intellectual property (IP) is a general term used to describe a range of legal rights afforded to information and ideas, which can stop others from using them without permission. Generally, they fall into two categories: registered rights, which require the owner to register their rights, and unregistered rights, which arise automatically. Protecting your intellectual property rights means that you can prevent competitors from using your ideas without your consent, as well as stopping others from using your logo and corporate identity. Please remember that it will be your job to ensure that no one else infringes your assets, others will not check to see if your IP rights have been infringed. At Stella Maris Solicitors LLP, we can help you register, patent and trademark designs, as well as help you to enforce copyright rights if they have been infringed.
What happens if my business cannot fulfil its contractual duties to its customers and suppliers?
If there is a valid contract, this will depend on what is in the contract itself, which will have clauses that set out what happens upon failure to deliver. If there are circumstances where an unforeseen event renders it impossible for the parties to deliver on their obligations, non-performance can be excused, and the contract will be terminated. If you are worried about any contract that you have entered into, please contact us and we will be able to help.