Owner Managed Businesses – What legal documents do you need?

We recognise that a large number of owner managed businesses (“OMB”) are based and growing in Lancashire, with Preston in particular being identified as the third most thriving city for businesses in the UK, based on data collected between 2014 – 2020 by SME payment provider, Dojo.

With a multitude of things to think about when developing and growing an OMB, it can be quite daunting to then also fully consider what legal documents you should have in place to best protect your business. It is essential, however, that an OMB protects its businesses right from its infancy by putting various legal documents in place to manage risk, to then updating and adding to those where appropriate.

In order to assist with this task, we have put together a non-exhaustive list of three key areas to consider:

1. Protecting your exposure

We understand that a lot of OMBs will have built up strong client relationships and often prefer a personable approach to conducting business. However, relying on relationships can be unnecessarily high risk.

We would always recommend protecting your business and its arrangements by agreeing or using well drafted and formal written terms and conditions, that include the specific arrangements between the parties. Such contracts can range from standard terms and conditions for the supply of goods and/or services to distribution agreements, confidentiality agreements or brand licences.

A well drafted contract will allow each party to expressly state their obligations and rights along with payment terms and liabilities. Failing to have such contracts in place will leave any business open to significant, and potentially costly, risks. Take a look at our previous article highlighting the importance of contracts.

2. Protecting your website

When setting up a new website for your business, it is natural to focus more on the content and aesthetic than the legal documents. However, there are many legal and procedural hoops that a website owner must comply with, such as content regulation and data protection.

Some of the key documents that we recommend a website owner has include:

• Website Terms of Use - details of the website owner/business including contact details, permitted use of the website, links to other policies (such as privacy and cookies policies), disclaimers of liability for content on linked sites and website availability.
• Privacy Policy - details of how data is collected, the different types of data and uses for it including how it may be shared, how data is protected together with the customers rights.
• Acceptable Use Policy - details of the standards that apply when customers upload content to the website and prohibited uses of the website.
• Website Terms and Conditions - necessary where there is a supply of goods and/or services and particularly important if goods/services are sold directly from the website. Such terms are heavily tailored depending on the type of goods and/or services sold. 
• Cookies Policy - information on the types of cookies used, details of the specific cookies used and information on a customer’s preferences.

It is important for such customer/client facing documents to be easily accessible and in plain English. This will allow every-day visitors of the website to fully understand their rights, how to interact with the website and how data is handled.

3. Protecting your intellectual property

Whether you are a small, medium or large business, you will have naturally generated some intellectual property (“IP”). This could be anything from your unique business name or logo to the way your products look or are made.

In certain situations, the UK recognises unregistered rights in a brand due to use of it over time, whereas others will require registration. A business will benefit from much stronger protection of its IP rights if it seeks to register them.

Registered IP rights can be anything from trade marks (being a sign that can distinguish the origin of good/services from those of a competitor to that of another and can include words, logos, shapes or a combination of elements) to patents (being a registerable monopoly right, which protects inventions). For further information, we would recommend taking a look at our blog setting out what intellectual property protection is and what it entails.

Our Commercial and IP team can take the load off OMBs by advising on, and assisting you with, the preparation any of the aforementioned documents or protection of your intellectual property rights, based on your individual business needs.  

For more information on what you may need to address to best protect your individual business, please contact a member of our Commercial or IP team.