Legal advice from Eleanor Woodall, a commercial paralegal, at FDR Law, Bold Street, Warrington.
Getting your business off to the right start
Q: I am setting up a new business. How important is it to create formal terms and conditions? I’ve read lots of background notes – is this something I can write myself?
A: It obviously depends on the nature and size of your business, but it benefits everyone, even sole traders, to have terms and conditions expertly worded on your sales invoices and contracts to maximise your legal and commercial position.
Whether you are a start-up business creating new documentation or an existing firm reviewing your current provision, putting in place appropriately-worded safeguards can significantly strengthen your position and protect you against future problems. If your business involves buying and selling, and interaction with the public or other business organisations, it’s an absolute must.
Everyone in business knows if you don’t keep the money coming in, you’re in trouble. Getting your legal wording right will help maximise your cash flow and minimise bad debt. If you do find yourself on the receiving end of bad debt, commercial solicitors can boost your chances of survival by helping you to re-structure, recover debts and claim interest on late payments.
Many company directors do not realise they could be disqualified or fined heavily if they continue to trade while their business is unable to meet its debts. Company directors can be held personally liable if they don’t take action to limit risks at the right time. It’s called wrongful trading which effectively means you’re trading while you’re insolvent and can lead to prosecution and heavy fines.
The best route for any new business is to get the fundamentals right at the beginning.