Practice Areas

COMMERCIAL LEASES

For most businesses, the biggest financial risk they take is when they sign a commercial lease. For even modest premises, the commitment you make when you sign a lease can often be greater than the value of your family home.

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In detail…

For example, a client was recently buying a night club, which involved taking on the commercial lease for the premises. The lease proposed by the landlord was £40,000 per year, with a term of fifteen years.

15 years x £40,000 = £600,000

Had client  just signed the lease, he would have entered a contract to pay the landlord the full amount – irrespective of how the night club performed financially. So if it had no customers and had to close after a few months, our client would still have owed the £600,000. Alternatively, if it became the next Hacienda, and needed to move to the bigger building just next door, the landlord would still get his £600,000.

We negotiated on our client’s behalf to change several important terms of the lease. Crucially, we got the landlord to agree to a ‘Break Clause’ at twelve months, giving our client the option of just handing back the keys at the end of a year. We also took a careful look at who was responsible for the fabric of the building, and took steps to protect our client from the landlord suddenly deciding that it needed a new roof financed by the tenant.

Remember, if you’re a sole trader rather than a limited company, when you sign a commercial lease you are personally liable for the debt. Similarly, some landlords insist on personal guarantees to get around the protection of a limited company.

The implications of signing a commercial lease can be financially disastrous. So NEVER sign one without first taking the best legal advice you can afford, from a solicitor who specialises in commercial property law.

If you are looking for commercial premises, get in touch to talk over what’s involved to make sure the lease you eventually sign is properly fair and doesn’t end up costing more than you can afford.

In detail…

It seems that everyone has an opinion on each of these issues, and many others. Yet often, these opinions have no basis in law. It’s because of this that employers can find themselves the subject of an Employment Tribunal, or even criminal prosecution.

Worse still, out of fear of these potential sanctions, some employers will simply try to sweep their problems with staff under the carpet. This causes the problems to fester, reducing staff morale, and ultimately costing a lot more money when they eventually see the light of day.

We help our clients stay on the right side of the rules, regulations and laws surrounding employment. From the issues surrounding employing foreign nationals, to handling disciplinary issues, we give simple, plain English advice. We’ll make sure your paperwork is in order, and help you concentrate on the real issues of making your business a success.

To talk in strictest confidence about employment law issues, please get in touch.

EMPLOYMENT LAW

There are many myths surrounding employment law:

  • Do you need to give female staff time off during pregnancy?
  • Does the Health and Safety at Work Act apply to very small businesses?
  • Do you need written contracts of employment?
  • Is sexual harassment outside of work the employers’ problem to deal with?
  • Can you sack lazy staff?
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CONTRACTS & TERMS OF BUSINESS

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In detail…

A gentleman’s word may be his bond, but if it turns out your customer is no gentleman, you need to be able to enforce your contract. With the English legal system being very heavily biased towards evidence, it’s very useful to have hard evidence of your agreement.

Without this, any court action can quickly descend into a “He said” / “She said” argument, and is unlikely to have a satisfactory outcome for anyone involved.

So your Terms and Conditions of Business is an essential document that sets out a number of key elements of your relationship with your customers. It clearly states the name and legal status of your business, an outline of the goods or services supplied (which can refer to a more detailed document, such as a quotation), how much you will charge, and when you want to be paid.

Well-drafted Terms and Conditions of Business can also provide a high level of protection to the business’ cash flow by stating what happens if payment is not received. Most often, this makes it clear that the goods supplied remain the property of the business until the customer has paid in full.

Finally, and most importantly, the Terms and Conditions of Business can limit the business’ liability in the event of any problems. This is important for anyone running a Limited Company, but an absolutely essential clause for anyone operating as a Sole Trader. Remember, a Sole Trader is personally liable for the business’ debts. A simple clause in the Terms and Conditions of Business can limit this liability to the value of the contract or goods supplied, and effectively indemnify the business owner from claims of consequential losses, which could otherwise run to millions in a worst-case scenario.

With the constantly evolving nature of the business environment, we also strongly advise a periodic review of your Terms of Business document. This ensures that it is up to date with any changes in the law, as well as any new laws or regulations. The latter is particularly important for anyone trading internationally – whether it’s from a small web shop or a supplier of specialist services to a global industry.

To talk about your Terms of Business, please feel free to contact us.

Pepperells is a friendly an affordable a modern law firm

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SHAREHOLDER & PARTNERSHIP AGREEMENTS

When you go into business with someone, you’re likely to spend more time with them, and have your finances & fortunes more closely linked to theirs than if you’d married them.

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In detail…

Like all (most) marriages, you set out with the best of intentions, certain that your future together will be a long, happy and fruitful one. Having a written agreement about how you’ll behave seems unnecessary, and just the sort of thing to take the romance out of the relationship.

Yet this is exactly what we would recommend. Every business should have either a Shareholder or Partnership Agreement that documents exactly what each of the parties rights and responsibilities are. These documents make it clear who owns the business, and what each of the shareholders / partners can expect in return.

This also allows you to have different arrangements for later investors. For example, it can exclude people from certain voting rights, or vary the proportion the dividends they get paid on their investment.

More importantly, Shareholder & Partnership Agreements document what is to happen in response to certain Trigger Events. For example:

  • The death of a shareholder. Do you want her shares to automatically revert to her husband, who you’ve always hated?
  • Similarly, in a divorce, a directors shares are counted in his assets.
  • A shareholder wants to retire. What are the arrangements or restrictions for him to sell his shares to the other owners?

For Partnerships, a written agreement is essential. Without it, the Partnership Act 1890 applies in full, and can have serious implications for all of the partners – especially in the event of any wrong-doing by just one of them.

Like all essential legal documents in a business, it’s also important that Shareholder and Partnership Agreements are regularly reviewed – we suggest this is done at the same time as your AGM. This provides you the opportunity to do things like adjust the value of the business that will be used in response to a Trigger Event, or update the details of any life insurances the business owners have.

If your business doesn’t have a Shareholders’ or Partnership agreement, or if it’s been several years since anyone took a detailed look at it, please get in touch, and we’ll talk you through what’s involved.

In detail…

When; your invoice is wrong (and no-one has thought to tell you); they don’t understand your invoice or in a very, very few cases, the customer is simply trying to ignore their responsibilities to their suppliers.

The end result of any of these can be disastrous for your business: Businesses don’t go bust because they’re not profitable, but because they run out of money. And if your customers aren’t paying you, you will soon run out of money.

Often, firms are very reticent about chasing debts with their customers. Understandably, they don’t want to upset the people who at one point promised to give them some money in return for the goods or services supplied.

To help with this, we run a specialist debt recovery service. We understand that you want your customers to pay their bills, without feeling that you’ve paid someone to mug them. So we do everything we can to help maintain your relationship with your customers, while at the same time making it clear that they do need to pay what’s owed.

Fees for commercial debt recovery are added to your customers bill. It becomes their responsibility to pay these, in addition to the money they owe you. The initial step is to issue a Seven Day Notice (the eponymous “solicitors letter”), at a cost of just £60.

Our experience has shown that over 95% of the time, this is all that’s required for the customer to settle their bill in full. We’ve had examples where clients have been paid tens of thousands of pounds that they’d been waiting months for, just as a result of this simple first step. But don’t think this route is only for large debts – no debt is too small to pursue.

To talk through the options for commercial debt recovery, please call our office. Remember – all our discussions with you are confidential, and we never charge to talk through your options at an initial enquiry.

COMMERCIAL DEBT RECOVERY

It’s an unfortunate fact of business that some customers will stretch your credit to breaking point. There can be several reasons for this – their own cash flow is tight, so they’re ‘robbing Peter to pay Paul’; their systems are just not coping with which bills need paying

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BUSINESS SALES & ACQUISITIONS

Starting a new business from scratch is always a risky enterprise – over half of all new starts fail within their first five years. Fewer than one in ten make it to their tenth birthday.

So it’s little wonder that many entrepreneurs opt for a softer start – buying an existing business.

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In detail…

It’s an unfortunate fact of business that some customers will stretch your credit to breaking point. There can be several reasons for this – their own cash flow is tight, so they’re ‘robbing Peter to pay Paul’; their systems are just not coping with which bills need paying and when; your invoice is wrong (and no-one has thought to tell you); they don’t understand your invoice or in a very, very few cases, the customer is simply trying to ignore their responsibilities to their suppliers.

The end result of any of these can be disastrous for your business: Businesses don’t go bust because they’re not profitable, but because they run out of money. And if your customers aren’t paying you, you will soon run out of money.

Often, firms are very reticent about chasing debts with their customers. Understandably, they don’t want to upset the people who at one point promised to give them some money in return for the goods or services supplied.

To help with this, we run a specialist debt recovery service. We understand that you want your customers to pay their bills, without feeling that you’ve paid someone to mug them. So we do everything we can to help maintain your relationship with your customers, while at the same time making it clear that they do need to pay what’s owed.

Fees for commercial debt recovery are added to your customers bill. It becomes their responsibility to pay these, in addition to the money they owe you. The initial step is to issue a Seven Day Notice (the eponymous “solicitors letter”), at a cost of just £60.

Our experience has shown that over 95% of the time, this is all that’s required for the customer to settle their bill in full. We’ve had examples where clients have been paid tens of thousands of pounds that they’d been waiting months for, just as a result of this simple first step. But don’t think this route is only for large debts – no debt is too small to pursue.

To talk through the options for commercial debt recovery, please call our office. Remember – all our discussions with you are confidential, and we never charge to talk through your options at an initial enquiry.

Link to: peter-millican-law-collingwood-buildings-newcastle

Any more questions? Feel free to get in touch

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