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There are many different types of businesses in the world and many of them are represented here. Most businesses are keen to get on with running their business and do not want to have to worry about what might generally be considered “paperwork”. Quite often, if a business (or those running it) has not paid attention to the following, they will “get away with it”. When they do not, however, the consequences can be catastrophic and extremely expensive. Certainly, the cost of dealing with each of the following will be much cheaper than dealing with the fall out if you do not.

Write it down!

This flows through the majority of the rest of the tips that we give. A lot of businesses are “done on a handshake” and that may often work very well. We very often find that there is no proper record of what people have agreed to do, agreed to pay, who they have agreed to employ or on what terms, for example.

What are you?

Businesses range from a single person trading on their own, to Partnerships, Companies, Limited Liability Partnerships, Community Interest Companies and so on. Many businesses are not really sure what they are – those in Partnership often refer to “the Company”. Do you know that Partners are jointly and severally liable for each other’s actions and for all the debts and liabilities of the business? You should know how your business is constituted and, of course, it should be written down. While the structure of a company will inevitably be more formal, if, for example, you practise in partnership with no written agreement, the partnership can be dissolved by any partner at any time and the assets will have to be sold and distributed under the Partnership Act 1890. Write it down.

Your Staff

Employment Law is a minefield. You should make sure that you comply with all relevant employment laws and, at the very basic end, make sure that your staff’s terms of employment are written down. You have a statutory obligation to do this. Beware of downloading templates off the internet. You should take advice from a decent source of employment or HR law. If you have a dispute with an employee, take it seriously.

Your Terms of Trading

Write them down. Whenever we deal with any sort of contractual dispute, ranging from an unpaid invoice to an allegation of poor workmanship, the starting point is the terms of the contract between business and the client. It is amazing how often there is precious little, or nothing, in writing. Unless what you have been contracted to do is clearly set out, it is very easy for a disgruntled client to allege you have not done what you said you would do and to the standard you said you would do it.

Your Bank

Make sure that you understand the arrangements that you have with your bank. Do not just sign documents that are put in front of you. At the very least, read them carefully and at best, take advice. In particular, be aware if any bank facilities you have can be withdrawn and on what terms and with what notice. Do you have to have done anything wrong, for example? Most bank facilities are simply repayable on demand.

The Tax Man

Engage a proper accountant to advise you as to your tax position. A good accountant can be the source of much professional advice on all manner of different subjects. You should appreciate that anybody can call themselves “an accountant”. Our suggestion would be that you should choose a qualified firm.

Consider a Power of Attorney

If you are incapacitated, mentally or physically, or are perhaps abroad when a decision needs to be taken, could anybody take it for you, or sign your name for you if required? A properly drafted Power of Attorney can allow for this. While it is sensible for everybody to have a Power of Attorney, it is particularly important if you are a sole trader because, obviously, if you are incapacitated, your business would be paralysed.

Make a Will

Succession planning is one of the most important things in small businesses and making your Will is an integral part of that. Who will take over your business? How will they run it? How will they pay for your interest if they are required to buy it? What does any Shareholders Agreement or the Articles of Association of your Company or your Partnership Agreement say about death? Take advice and write it down.

Your Premises

Whether you are a landlord or a tenant, beware of signing leases without proper advice. A full repairing lease carries an obligation to put a property into repair if it is not in repair (in broad terms) and this is one point to look out for as a tenant. As a landlord, if you allow somebody into possession who then runs a business, they are likely to become a “sitting tenant” and you will have difficulty in getting rid of them. Take advice and (yes) write it down.


While not something that lawyers are directly involved with at the “front end” many disputes involve insurers. Lots of businesses do (and should) carry Professional Indemnity Insurance in case they get sued for making mistakes and, of course, Employers’ and Public Liability insurance. Make sure you are covered. Make sure that you give full disclosure to your insurer of all relevant facts to avoid the possibility of the insurer avoiding the policy if a claim has been made. Crucially, many insurance policies require the insured to notify the insurer as soon as they think a claim is likely to arise. If they do not, the insurer will not pay. Equally crucially, don’t admit anything!

Debt Recovery

Cashflow is king as somebody once said. Make sure your terms of business require clients to pay quickly and on time. If they do not pay, take the relevant action. This may range from a gentle reminder to issuing Court Proceedings and anything in between. An active credit control and debt management policy is essential. Don’t leave debt collection to the most junior member of staff.


The above are simply some sensible suggestions most of which will apply to any business of any type, big or small. You should concentrate on what you know best which might range from making pasties, to selling insurance or fixing computers. Do not forget about the other stuff.


If you would like any more information, please contact Julie Rowan on 01208 72328 or

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