Start up structures and legal growing pains
- 1. Eastern Enterprise Hub – 4 April 2014 Start-up structures and growing pains Jon Bloor Partner – Corporate Services jbloor@prettys.co.uk 01473 298219
- 2. Company limited by Shares –Articles of Association –Companies Act 2006 –Companies House –NOT suitable for charities –Limited liability –Dividends –Directors duties
- 3. Company limited by guarantee –No shares –Members' guarantee –Limited liability –Suitable for charitable status –Can have "asset lock"
- 4. Company limited by guarantee –Shares or guarantee –CIC regulation –Limited liability –Can't be a charity –Asset lock –Community interest test
- 5. Sole trader –No constitution –Unlimited liability –No specific regulation –Income tax?
- 6. Partnership –Partnership Agreement?? –Partnership Act 1890 –View to a profit –Joint & several liability –No registration –Tax transparent
- 7. Limited liability partnership –Members Agreement?? –LLP Act 2000 –Limited liability –No charitable status –Companies House administer –Taxed like a partnership
- 8. And the rest… –Charitable Trust –Charitable Incorporated Organisation (CIO) –Industrial & Provident Society (Comm. Ben. or Coop) –Unincorporated association –Limited Partnership –Hybrid structures (tax planning)
- 10. Employees • Employment Rights Act statement • Employment contracts? • Policies? • TUPE • Help?!
- 11. Premises • Freehold • Leasehold • Licence • Pop-up? • The garage
- 12. Supplier contracts • Payment terms • Distribution (exclusive, sole etc.) • Likely to be stuck with standard terms • But… don’t overlook smaller suppliers
- 13. Customer contracts • Standard terms for sales of products and services • Payment terms • Passage of ownership and risk • Limitations of liability
- 14. Shareholders Agreements • Granting shares to promising new employee • Transfer restrictions • “Leaver” provisions • Management and disputes?
- 15. Employee incentives and ownership • Share Options • Enterprise Management Incentive • Employee Shareholder status • Mutualisation
- 16. Moving into e-commerce • New website • Distance Selling Regulations • Payment processing • Fulfilment and delivery • More contracts?!
- 17. Outsourcing • Warehousing • Fulfilment • Contractual protection • Service Level Agreements • TUPE
- 18. Funding – banks • Overdrafts • Term loans • Invoice financing • Personal guarantees • Debentures and security
- 19. Funding – private equity • Equity stake • IRR • Exit focussed • Value driven • Sell your business the day you take on PE funding?
- 20. Funding – the crowd? • Kickstarter • Peer to peer lending • Crowd sourced lending • Equity crowd funding • Is this the future?
- 21. Intellectual Property • Trade marks? • Website IPR • Audit of IPR portfolio • Registrations and maintenance • Debentures and security
- 22. Data Protection • Notification • Fair processing • Security • ICO fines - £200k!
- 23. Growing by acquisition • Horizontal (competitors) • Vertical (supply chain) • Diversification • Due diligence and legal documents
- 24. Corporate governance • Banks and investors • Management team • Non-exec directors • Corporate governance code (listed companies)
- 25. Exit routes (1) • Sale • Winding up • Management buyout • Initial Public Offering
- 26. Exit routes (2) • Due diligence (again) • Sustainable without founders? • Legal documentation • Impact on value • Succession planning (not just an “exit” issue)
- 27. Questions?