The Corporate and Commercial team recently spoke about what we believed would help businesses in the region from a legal perspective. Whilst we discussed a number of ideas we found that the answer was simple! Whether your business is a start-up or has been established for many years, people just want to know what legal commercial documents they should have in place and why.
When running a business, there are a range of commonly used legal documents that you should have, for different purposes, and having the correct legal documentation in place is vital in protecting a business and its products, services, and success. Many business owners are aware that they should have some written legal documents in place, but they are not sure what it is they need and why they need it.
Over the years, we have seen businesses which have no commercial documentation in place, or only have some documents, and the documentation which they do hold does accurately cover their business operation or it does protect their interests and wishes appropriately.
Following our discussions, we decided to create an interactive tool on our website which would act as a starting point for businesses to understand what commercial legal documents they should have in place. We have created a questionnaire to enable us to understand the user’s general business set up and operation – you can view this here. The user is required to answer all the questions and once submitted, a list of recommended documents will be provided which their business should consider having in place, as well as providing information as to why they should have such documentation.
Why is it important having commercial legal documentation in place?
There are several reasons why it is important to have commercial legal documentation in place for your business, and some of these are:
- Written documents can act as safeguards, protecting the business and its owners in accordance with their wishes. You may wish the business to operate in a certain way, but you may be unaware the businesses governing documentation conflicts with such wishes and that the governing documentation takes precedent.
- Both the business and its customers will have clarity and certainty in relation to the basis upon which they are transacting with one another which, in turn, will help avoid any potentially costly and lengthy disputes further down the line.
- Documents can provide a framework and having a standard document drafted can be quicker, more consistent, and cheaper for the business.
- The business can gain greater trust from customers.
- Not providing certain information to people, depending on your customer base, could lead to potential enforcement action due to non-compliance with UK laws.
Why should commercial legal documentation be bespoke?
Many business owners often attempt to use other businesses’ documentation as their own as a cost saving exercise. This should be avoided at every opportunity.
Firstly, there is the issue of copyright. In basing your legal documents on the documents of another business, you will be at serious risk of breaching copyright laws.
Secondly, every business is different, from the way it operates to its legal structure and there is no one size fits all for the drafting of legal documentation. Whilst the documents used by another business may look professional and legally sound, there is the risk that the information within the documents are outdated or simply incorrect for your business (even if you think the business is just like yours!).
Some people use document generators online and these should also be avoided. Your documentation needs to be able to hold up to any legal argument and using incorrect information within it could cause enormous problems. You want to cover your business appropriately and adequately, as well as yourself as owner.
Furthermore, even if you have previously had bespoke commercial legal documentation drafted, it is important that you keep such documents under regular review to ensure compliance with current UK laws.
It is a great idea to invest a little time to prepare original bespoke documents that you may rely on in the future as a point of reference in case of doubt or any disputes. This will often save you time and money later down the line.
If you would like to speak to someone in our corporate and commercial team about your businesses legal documents, call 01642 356500/0191 2322574 in the first instance.