startup law: how to get started
DESCRIPTION
Slides from our free legal seminar on 17 Sept 14. An introduction to law relevant to UK startups covering incorporation, tax, risk factors, insurance, terms of business, data protection, seeking funding and other relevant legal topicsTRANSCRIPT
www.buckworthsolicitors.co.uk
!STARTUP!LAW:!HOW!TO!GET!STARTED!!
!MICHAEL!BUCKWORTH!
!!!
www.buckworthsolicitors.co.uk
WHAT!ARE!WE!COVERING?!
• Incorporation!
• Risk!Assessment!
• Insurance!
• Compliance!
• Intellectual!Property!
• Selling!online!
• Customer!terms!
• Investment!
www.buckworthsolicitors.co.uk
ABOUT!BUCKWORTH!
• Founded!by!Michael!Buckworth!in!2011!
• Only!law!Qirm!in!the!London!Market!focusing!solely!on!startups!!
• Acted!on!45%!of!startup!investment!rounds!in!the!London!market!in!2013!/!14.!!
www.buckworthsolicitors.co.uk
INCORPORATION!
• What!structure!to!use?!• Limited!company!• LLP!• Sole!trader!
• Reasons!for!using!a!limited!company!• Limited!liability!• Separate!tax!treatment!• Easy!to!bring!on!investment!/!sell!the!company!
• Costs!of!setting!up!a!limited!company!• £15!• Standard!articles!are!Qine!until!investment!• £0.01!shares!
www.buckworthsolicitors.co.uk
INCORPORATION:!TAX!REGISTRATIONS!
• Corporation!tax!• Mandatory!registration!on!commencement!of!trade!• Annual!corporation!tax!return!• Corporation!tax!at!20%!up!to!£300,000!
• VAT!• Mandatory!registration!at!£81,000!revenue!• VAT!at!20%!
• PAYE!• For!all!employees!• Deduction!of!income!tax!and!NI!from!employee!salaries!• Employer’s!contribution!NI!
www.buckworthsolicitors.co.uk
RISK!ASSESSMENT!
• Is!the!business!legal?!
• Is!it!regulated?!
• What!the!Qinancial!risks?!
• What!are!the!risks!to!customers?!• How!can!risks!be!reduced?!• Limitation!of!liability!• Insurance!
www.buckworthsolicitors.co.uk
INSURANCE!
• Types!of!insurance!• Public!liability!insurance!• Employers’!liability!insurance!• Professional!indemnity!insurance!• SpeciQic!insurance!!
• Things!to!consider!• Matching!exclusion/limitation!of!liability!with!insurance!• Excess!!• Exclusions!
www.buckworthsolicitors.co.uk
COMPLIANCE!
• Data!protection!• Data!Protection!Act!1998!• What!is!personal!information?!• Obligation!to!register!with!the!ICO!• Purpose!of!a!privacy!policy!
• Tell!customers!what!information!you!collect!• What!you!do!with!it!–!usage!/!storage!/!disclosure!• What!it!will!be!disclosed!(and!secure!consent!for!disclosure)!• Explain!use!of!cookies!• Set!out!customer!rights!
!• Regulated!activities!
• Financial!services!• Gambling!• Solicitors/accountants!• Employment!business!
www.buckworthsolicitors.co.uk
INTELLECTUAL!PROPERTY!
• What!is!IP?!!• IP!often!belongs!to!the!creator!i.e.!the!founders!individually!or!a!developer!contractor.!
!• To!transfer!IP!to!your!company!the!creator!must!sign!a!written!agreement.!
• Transfer!of!all!IP!created!prior!to!date!of!agreement!• Automatic!transfer!of!all!future!IP!on!creation!• Undertaking!to!execute!any!agreement!required!to!transfer!IP!• Grant!power!of!attorney!to!company!to!execute!any!document!in!his!name!
on!his!behalf!
www.buckworthsolicitors.co.uk
INTELLECTUAL!PROPERTY!
If)creators)of)IP)don’t)transfer)the)IP)to)the)company,)the)company)does)NOT)own)the)IP.)
RESULT:!
• The!creator!may!prevent!the!company!from!using!or!amending!the!IP!
• Investors!may!not!invest!in!the!company!• The!company!may!have!to!pay!signiQicant!sums!to!the!creators!to!purchase!the!IP!
www.buckworthsolicitors.co.uk
SELLING!ONLINE!
• Documentation!• Terms!and!conditions!with!customers!• Privacy!Policy!• Policies!
• Relevant!legislation!• Sale!of!Goods!Act!• Distance!Selling!Regulations!• VAT!analysis!
• Refund!policies!• Cancellation!policies!!
www.buckworthsolicitors.co.uk
CUSTOMER!TERMS!
• Limitation!of!liability!• Exclusion!of!some!risks!• Limitation!of!other!risks!• Insurance!for!risks!that!cannot!be!limited!or!excluded!(death,!personal!
injury,!fraud,!gross!negligence)!
• Termination!• For!nonfpayment!• At!will!(if!no!longer!economical)!• On!insolvency!of!customer!
• Provisions!• Due!date!for!payment!• Formal!demand!for!payment!• Interest!on!late!payments!
!
www.buckworthsolicitors.co.uk
FUNDING!
• Friends!and!family!• Seed!funding!• Generally!smaller!amounts,!smaller!equity!stake!• Relatively!few!restrictions!• Loan!or!equity!
• Angels!• High!net!worth!individuals!who!invest!their!own!funds!directly!usually!in!
return!for!equity!and!maybe!a!position!on!the!board!
• VCs!• Private!equity!funding!looking!to!invest!in!companies!with!high!growth!
potential!
• Debt!Qinance!!
www.buckworthsolicitors.co.uk
HOW!CAN!WE!HELP?!
• We!can!assist!with:!• Incorporation!and!set!up!• Website!terms!and!conditions!• Customer!contracts!• Privacy!policies!• Commercial!agreements!• Employment!/!contractor!agreements!• IP!agreements!and!protection!• Shareholders’!/!founders’!agreements!• Investment!rounds!(SEIS!/!EIS!/!VC)!• Sale!of!business!
!
www.buckworthsolicitors.co.uk
FURTHER!INFORMATION!
• Take!our!free!“introduction!to!startup!law”!brochure!
• Check!out!our!website!at!www.buckworthsolicitors.co.uk!
• Attend!one!of!our!seminars!
• Contact!us!by!email!or!telephone!!