An Instagram Page is not a business ...but it's a good start.


Disclaimer: ....yes, you can build a brand and/or business on Instagram and other Social Media platforms, however an Instagram Page is not in itself a business. Behind the scenes your favourite influencers have agencies negotiating contracts for their brand deals and product placements. The latest Instagram destination restaurant will have instructed Solicitors to negotiate the lease or license for their business premises and that trending fashion brand will have trademarked their name, logo and copyrighted their garment designs to protect their brand from copyright infringement.


Whilst a carefully curated Instagram Page will attract followers who may engage and convert into customers, an Instagram Page is essentially the shopfront to the business.


If you are a new business owner, a start-up or you are pivoting your existing business, the following points will be fundamental to ensuring that you put your business on a sound footing.


Business Structure


The four most common types of business structure in the United Kingdom are:

  • Sole Trader

  • Partnership

  • Limited Company (Limited by Shares or Limited by Guarantee)

  • Self Employed


If you are considering entering into a business Partnership or becoming a shareholder in a Limited Company it is advisable to sign a Partnership Agreement or Shareholders Agreement to document the terms of the business relationship between the parties. If you were to enter into a business relationship with a stranger you would insist on having a contract which sets out the legal relationship and obligations of each party, so why would you not formalise the business relationship with a friend or family member. Things can and do go wrong and I am sure that we all know someone who has fallen foul of a joint venture even when both parties had the best intentions at the outset. The benefit of a signed agreement is that it will ultimately put the owners on an equal footing and protect each party should things go wrong.


Shareholders Agreement


A Shareholders Agreement is a contract made between the shareholders of the company setting out the respective rights and responsibilities relevant to the operations of the company. The typical provisions found in the Shareholders Agreement include: the shareholding structure, how shares are split, how profit is distributed and who makes the financial decisions. A Shareholders Agreement shall also contain confidentiality provisions and have a process for resolving disagreements.


If you intend to bring on investors in the future they will also seek to agree to the terms of a Shareholders Agreement so it is a good idea to have one in place beforehand.


Partnership Agreement


A general partnership is defined as the relationship which exists between persons carrying on a business in common with a view to profit (Section 1, Partnership Act 1890).


There are three main types of Partnerships within the UK: 1) A General Partnership 2) A Limited Partnership 3) Limited Liability Partnership


In the absence of a Partnership Agreement the following is an example of the terms that will be assumed to apply should the matter proceed to Court for any reason:

  • all partners are to share equally in the capital and profits and contribute equally to losses

  • the partnership must indemnify any partner for payments and liabilities incurred in the ordinary and proper conduct of the partnership’s business

  • every partner may take part in the management of the partnership business

  • no partner is entitled to any remuneration for acting in the partnership business

  • no person may be introduced as a partner without the consent of all existing partners

  • any differences as to ordinary matters connected with the partnership business may be decided by majority vote but a change in the nature of the business requires unanimous consent

  • no majority of the partners can expel any partner unless a power has been conferred by


Protecting your Brand: Intellectual Property


A business when building their brand will want to consider how they can protect the intellectual property which includes the business name, concept and any unique characteristics. The most well-known type of intellectual property is trademark, copyright and patents. In protecting the intellectual property a business can prevent another business from copying them and benefitting from the reputation and goodwill that they have built for their brand.


Trademark


A Trademark is a registered intellectual property right which allows you to protect your brand. Traditionally a trademark is a name 'Nike' or symbol 'the McDonald’s Golden Arches', but it can also be the shape of a product 'Apple' or its packaging 'the Coca-Cola bottle', or even a color 'Louboutin Red Sole 'Pantone 18 1663TP' or the sound 'Delibes' Flower Duet from Lakmé', trade marked by British Airways. An application to trademark your brand name, logo, sound etc will be made to the Intellectual Property Office. However, at the earliest stage when designing a trademark, businesses are advised to check the register to ensure that 1) another business has not registered a similar trademark 2) that their trademark meets the requirements to be registered as a trademark.These precautionary actions will help businesses avoid incurring significant costs when branding their business only to be informed that the name is already in use or the trademark does not meet the requirements.


Copyright


Copyright protects creative works such as a book, a piece of music, artwork, a

drawing, a movie, a fashion design*, or even this very article, the intellectual property right in the work itself is a copyright. As soon as the work commences and is completed so as to be enduring the creative will own the copyright (the exception to this is if the work has been created for hire). Whilst copyright cannot be registered, creators are advised to keep accurate records of dates and or times that they created said works in order to bring a successful claim for copyright infringement should it be necessary to do so.


*'if the works qualify as a work of artistic craftsmanship'



Trademark Infringement


Trademark infringement occurs where a registered trade mark is used in the course of trade without the proprietor's consent and there exists a likelihood of confusion on the part of the public which includes a likelihood of association. Alternatively the use of the trademark sign, without due cause, takes unfair advantage of, or is detrimental to the distinctive character or the reputation of the trade mark.


Passing off


If a business has not registered their trademark and another business uses a name which is very similar to that of the existing business, the other business may be able to bring a claim under the Tort of 'Passing Off'. Passing Off essentially involves making a representation that is likely to encourage another to believe that goods or services are those of another. In other words, it prevents the unauthorised use of another’s goodwill.



Written Terms & Conditions


A Written statement of Business Terms and Conditions is required by businesses as it will set out the obligations and rights of each party who is entering into a business relationship. If your business engages with consumers then consumer legislation (e.g. Consumer Rights Act 2015, Sale of Goods Act 1979, Supply of Goods and Services Act 1982) will also need to be considered as part of your businesses contractual obligations.


Privacy Notice


If you are a "controller" of personal data under the UK General Data Protection Regulations (GDPR), then the business must provide certain information to customers as to how the business will process their personal data (such as collecting, using and sharing their personal data). This is usually in the form of a privacy notice which can be displayed on your business website.


Employment Contracts


As an employer of staff, businesses will be legally required to provide their employees with a written statement of the specified terms of employment under Section 1, Employment Rights Act 1996 within two months of the commencement of the employment.It is recommended that employers provide written contracts of employment with precise terms to minimise the risk of a dispute regarding the terms and conditions.


The other factors that a business should consider when employing staff includes:

  • Do the proposed employee have a confirmed right to work in the UK?

  • Do you have a Staff Handbook?

  • Do you have Grievance and Disciplinary policy and procedure in place?


Non-disclosure Agreement (NDA)


An NDA is an essential tool for managing the disclosure of sensitive business information both internally and to other parties. It sets out:

  • Restrictions on a receiving party's use, disclosure, and return of a disclosing party's confidential information.

  • The parties' related rights and obligations.


The Grant of a Business Leases or Licence to Occupy


Business Lease or Licence to Occupy?


If the business is operating out of commercial premises the business will have to decide whether to sign a Business Lease or Licence to Occupy.


Lease

A lease is the grant of a right to the exclusive possession of land for a determinable period of time. The tenant has a statutory right to renew its tenancy at the end of the term if it occupies the premises for the purpose of its business (Sections 24-28, Landlord & Tenant Act 1954). However, the parties can agree to opt out of statutory protection under the Landlord & Tenant Act 1954.


Licence

A licence is simply permission for a licensee to do something on a licensor's property. A licence provides no security of tenure and is normally more suitable for short term occupation of premises.


For further assistance or advice on any of the topics covered in this article, please get in touch here.






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