Life seems busier than ever, and your priority is no doubt focusing on the financial growth and stability of your business. Growth triggers change and requires that you respond and adapt your business accordingly. Conducting a legal health check-up to see if your SME meets its legal obligations is a great place to start in making sure that your small business is meeting all of its legal obligations.   

First up. Business structure – have you got it right?  

You may have started out as a sole trader, but perhaps you have been asking yourself if it is the right structure for your growth, your liabilities and tax obligations? 

Or you might have started your business sitting around a kitchen table with a few friends late one night, but now you have decided that you really should document your arrangements in the form of a shareholders’ arrangement or a partnership agreement.   

Next up.  You might have been trading for a while, but have you checked as to whether or not your business’ consents/licenses are correct, up to date? Do you even know what consents / licenses you should have? 

Have you developed any intellectual property that really should be registered in order to protect your brand, your products and your services?  Is your business name and your logo trademarked, and if not, have you considered the risks to your growth if another business registers and uses your business name? Have you made the right enquiries to make sure you are not infringing on anyone else’s trademarks?  

Third. Employees – you have spent a lot of energy and time finding those awesome people that best fit your business.  We all know that our human capital is an absolutely integral asset in our businesses.  Have you onboarded every employee correctly with properly executed employment contracts/consultancy agreements, and have they received training in your core policies?   

Speaking of policies, when was the last time you actually looked each policy over to make sure they are up to date?  Do you have all the policies that you need for your business, e.g., addressing equal opportunity, day to day work arrangements, health and safety, risk management, discipline, performance, grievance, leave and termination of employment?  Perhaps it might be time to put together that employee handbook you’ve been thinking about for a while to ensure that your expectations are well understood by your employees. 

Fourth.  Premises. Have you bought or leased commercial premises for your business? In either case, are there any relevant planning permissions/restrictions which might make the premises unsuitable for the type of business you wish to conduct? If leased, have you diarised the dates on which your future renewal options fall due? Do you know what your ongoing costs are, especially things like service charges and insurance? What if you need to expand to bigger premises, do you know what your break provisions are and how to trigger them? 

Fifth. Data protection (deep breath)…. You know you need to think about data collection, your privacy policy and your website notices, but where to start? It may come as a surprise, but your customers actually really do care about what you do with their data.

Do you understand your privacy obligations relating to the collection, use, holding and disclosure of personal information, not just in the UK, but also in the EU and beyond? Have you communicated your privacy policy to your employees and customers?  

Have you put in place a collection notice in place to notify your customers when you are collecting their personal information? Have you established appropriate protection to ensure the safety of any data stored on third-party systems or disclosed to third parties, including overseas? Lastly, have you thought about how you deal with all of this information when you no longer need it? The importance of having appropriate systems in place dealing with the retention, storage and disposal of personal information as well as your business documents cannot be understated.  

All of these SME legal obligations of a business set out above may sound onerous and let’s be honest, more than just a little bit tedious, especially when all you want to do is “get on and do”.  So, do you really have to consider all of these points, and no doubt many more, before you even begin to dive headlong into establishing commercial connections, contracts and customers/clients?   

The short answer is yes, you absolutely should.  If you spend a bit of time and energy, it’s truly possible for your business to have suitably robust practices and procedures in place which will facilitate your growth, stability and long-term viability.   

The good news is we have lawyers and industry experts at our fingertips who can help you, because we’ve all had experience in running our own small businesses.  Addressing legal considerations in the SME world aren’t just something that can be done overnight or ticked off and put to the back of a filing cabinet to be forgotten about.  It’s an ongoing journey.  One that we would love to go on with you.  

Thank you to Belinda Sullivan for this article.