East London Solicitors

EAST LONDON SOLICITORS SMALL BUSINESS TIPS & GUIDE

Tips to avoid insolvency

1. Business plan

Incorporate a business plan into your organisation and review it frequently. It should specify the aims of the business and identify ways of achieving the goals.

2. Control your business

Establish your financial situation up to date and estimate account for the next year.

3. What is your market?

Find the best marketplace for your products or services. Ensure that they have competitive prices and are distinguishable from the other products.

4.  Ascertain your risks

Use different suppliers and obtain credit insurance if a customer fails to pay for your product or service.

5. Concentrate on your turnover

Put credit control procedures in place, specifying how to resolve the problems and check your new customers

• Employ external debt collectors
• Check all customer credit limits regularly

6. Different supplies of funding

Consider asset-based lending and invoice discounting

7. Retention of Title

If appropriate, a retention of title (RoT) clause should be included in your trading agreement. This will allow you to claim the goods if the customer becomes insolvent.

8. Insolvent customer

The appointed insolvency practitioner should be informed as soon as the problem occurs to maximise the money you are owned.

9. Unexpected situations

Get legal advice as soon as someone from within the organisation dies or gets divorced to avoid business problems.

10.  Take legal advice at the earliest opportunity

Contact solicitors or a licensed Insolvency Practitioner

Checklist for deciding whether to start a new business

• What is your motivation for starting a new venture ?
• What is the best business structure to mitigate risk, save tax and provide flexibility ?
• What skills do you have and what skills are needed by the business ?
• What are the new business initial funding requirements not only right at the outset but a year down the line ?
• Who and what are the competition and barriers to entry – what are their strengths and weaknesses ?
• The marketplace
• what staffing requirements do you have now and anticipate having in say a year’s time ?

Tips to ensure sure your terms and conditions apply

• Make sure your terms & conditions are clear and as brief as practicable and that you supply them to your customer as early as possible. Perhaps include your terms in any brochure, catalogue or other marketing materials but in any event, ensure that you incorporate them clearly on your order forms.
• Ensure that your sales team always follow your procedures,  and are fully briefed on the importance of your terms and conditions being the basis of the contract between you and a customer or client.

What are Articles of association ?

These are very important in Company law; they are the internal rules for a limited company, often to be considered in conjunction with any shareholders agreement.

What do articles deal with ?

Articles of association will generally deal with procedure for calling meetings, whether general meetings or extraordinary meetings, powers of directors, shareholders rights and any protection for minority shareholders, policy on payment of dividends, circumstances on which the company will be wound up and many other important issues.

Do we need to get articles prepared for any new limited company we set up ?

A new company must have articles when first incorporated but in the absence of any amendments made at that time, the company will have standard articles implied, which are known as table a articles. These do deal with many of the issues described in the prior question, but there are some very important issues that are not necessarily suitable for every company in table a, such as adequate protection of minority shareholders, pre-emption rights and such like, so it is worth taking advice when setting up your company.

Click here for the small business legal advice page or here for the Commercial law main page for East London.