Understanding the legal lifecycle of your business
It can be difficult for business owners to recognise their legal obligations or at what stages within their business lifecycle to seek legal advice. This means that the potential for issues is more likely and could result in the business undergoing tougher legal action.
From conceptualisation to retirement each step along your businesses journey has its own legal requirements. Below we have defined the five stages of a business and the subsequent legal matters attached.
Also known as the ‘seed’ stage when your business is an idea.
At this initial stage, a lot of work is focused on identifying the market and opportunities for this new venture. Additional things to focus on are deciding the businesses ownership structure, establishing a business plan, and finding professional advisors. It is common for entrepreneurs to rely on cash from personal savings, friends, and family and/or government grants during this early phase.
You may require legal assistance in this stage such as:
- Operating agreements – these govern the relationship of the partners in your business and establish each person’s role within the company. It is essentially the legal foundation of your business.
- Trademarking – If you are a retail store, restaurant, bar, product manufacturer, or intend to franchise in the future then trademark your name immediately. Otherwise consider trademarking your name once you establish a reputation.
- Commercial leases, permits and occupational licenses – any business that is leasing retail space should always seek legal assistance to review their commercial lease agreement. It is also important to ensure that you have obtained all the permits and occupational licenses for your business. You can always discuss with your solicitor about the types of insurance you should have.
The business is born and most typically in the form of a private limited company by shares. Often considered the riskiest phase, the main challenge is to have enough funding to cover the set-up costs before you are ready to start trading.
In addition to the first phase set out above, you it is worth considering legal advice in relation to following:
Funding – We can advise you on seed and angel funding, private equity, venture capital and how funding rounds work. We can help you understand the differences between types of funding, untangle the intricacies and get you up to speed with funding rounds from A to B and beyond.
Part of the GL Group of Companies, GL Business Consultancy (GLBC) can help you get your business investment ready. GLBC will assess the suitability of your business for different types of finance options and work with a network of advisers if appropriate.
Employment Law – contracts of employment should be prepared for any employees or directors.
Growth and Establishment
The business has an increased market presence and revenue is increasing which results in the need to hire new employees to deal with the increase of work. An effective management team is required, and the business plan will need updating.
The legal services you should seek during this phase are:
- Labour and Employment Law – as your business expands and you take on more staff you will need to build employment contracts, a company handbook, and be aware of all employment issues that could arise, such as pay, discrimination, overtime procedures etc.
- Intellectual Property – all business names, logos, and slogans should be trademarked.
Expanding the business could include adding new products or services or expanding into new markets or customer types. As well as, investing into new office space. Similar to the Concept and Launch stages above, this stage requires planning and research. The expansion could be achieved by way of joint venture, new investors or borrowing.
In this phase you will be potentially looking at:
- Additional Commercial Lease Negotiations/Real Estate Acquisition – you may be looking to expand your office space and in doing so would need assistance.
- Additional Funding – such as funding/venture debt agreements.
Maturity and possible exit
You’ve successfully run your business and you are looking at the opportunity to exit.
It is important to get a proper valuation of the company and set up a business transition plan. Whether you’re passing on to employees, family or selling, we can help evaluate your options and facilitate opportunities.
In this phase you may begin to look at:
- Business Succession Planning – evaluating the transition of management and the ownership of your business.
- Tax Planning
Expert corporate legal advice
If you are looking for highly skilled corporate solicitors with technical expertise and a breadth of experience to guide you through any stage of your business legal lifecycle call 0117 906 9400 or email firstname.lastname@example.org for further information.