Loading...

Follow A City Law Firm | Leading London Entrepreneur L.. on Feedspot

Continue with Google
Continue with Facebook
or

Valid

CashFlow its an issue for every business. Our founder was asked to speak with other CEOs as a legal adviser & business owner to offer her top tips. NatWest sponsors spotlight sessions with Mary Portas.

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Karen Holden of A City Law Firm has represented hundreds of tech businesses and sees the same issues time and time again. Here's what to look out for and how to navigate the legal minefield.

This month my company (A City Law Firm) marked our ten-year anniversary, which has made me think back to our first year, how we started and some of the early mistakes we made. For one thing, within a year of our launch, we had to restructure the entire business and there were so many hurdles we had to overcome – in the early days it really was about survival.

What’s fascinating is many of the mistakes we made back in 2008 are the same mistakes that many tech start-ups make time and time again. I know this because over the past decade we have represented hundreds of tech businesses – from start-ups to big businesses – and I find that time and time again the same issues crop up.  So what are they?
  1. Not having a strong shareholder agreement – or discussing, formulating and documenting the business plan with co-founders

I intended to found my business with three others, however I soon realised that our goals and objectives were sadly not aligned; our work ethics were very different and our long-term motivations out of sync. Luckily, I had drafted a very good partnership agreement so managed to break free from what would have been a disastrous relationship. This enabled me to continue with A City Law Firm with just me at the helm, but not all businesses I have encountered can say the same.

Not only do you have to be careful to choose the right partners, but you need to clearly document your goals in a shareholder’s agreement. This means that as founders you can build upon the platform you have created together, but if it goes wrong you have a means to address the problem, not just having to wind up the company. The key is choosing the right partners, talking candidly and asking the tough questions at the beginning.

  1. Having poor contracts or no contracts – hitting your cash flow

You need to understand your marketplace, your competitors and what you need financially to be able to grow.

Cash is king. Be realistic with budgets and prices and ensure your contracts protect you; not only with clients but with employees, suppliers and contractors. It is fundamental that you closely monitor payment timescales with clients, especially if you are working on large projects. Corporate clients may expect 60-90-day payment terms but your sub-contractors will not.

It’s also important you pay yourself a reasonable salary, especially when you are seeking investment, otherwise, if the founder is distracted, the business is not going to progress. Any investor will want to see this factored into any business plans and financial models.

  1. Not having good staff contracts or options to incentivise them

A large part of any company’s budget will be put towards recruitment, training and retention of its employees. Despite this, there is a real risk that those key people could walk out of the door leaving you without the requisite skill pool you need, but worse yet, there is a real possibility that they may also take all of their knowledge of your business and pass it to a competitor.

“Have tight employment, contractor, consultancy and sub-contractor contracts in order to protect your IP and confidentiality”

Many businesses focus on many things but staff retention and protection against staff competition is often neglected. This is especially key in the tech world as the opportunities for work are so great.

From a legal standpoint, it is important to:

  • Have tight employment, contractor, consultancy and sub-contractor contracts in order to protect your IP and confidentiality. It is also important to have restrictive covenants to avoid staff taking your know-how in terms of clients, IP or staff to a competitor or setting up on their own.
  • Consider EMI options as they can give staff the feeling of being part of the fabric of the business and as you succeed so do they in terms of profit sharing without actual cost in the short term to you. This also can attract more specialist experts to the team where cash is not readily available.

Overall though the key is to find ways to incentivise and look after your team. If you can communicate your vision to the team so that they are working side by side with you, this inspires loyalty and dedication as you are all working from the same plan with the same goal.

Intellectual property and the mistake of that ‘handshake deal’

IP ownership can only be granted or transferred (‘assigned’) in writing. As such, if your freelance coder or developer has no contract with your business then they could actually own the IP that they have helped design, not you.

If there is a dispute, then they could hold this to ransom causing a costly dispute or loss of your code or design. You need to ensure you have checked these contracts carefully and that you actually have one carefully drafted in your favour. Many tech companies work with friends and often make arrangements based on goodwill, but when a dispute arises without a contract you are at the mercy of the designer.

If you are bringing your designing or coding in-house, then it is especially key to convince an investor you have secured long-term staff and that the IP ownership will effectively transfer to you.

Many businesses fail to check that their proposed company name or branding is free to trademark. This should be carefully checked before a large budget (or large budget relative to the size of your business) is set aside for branding and marketing as otherwise, you may find yourself having to start all over again.

  1. Rushing to investment and giving up equity in the company

I managed to self-finance my business throughout without taking in partners or investors. I did consider these at points along the way and even had offers of mergers and partners coming into the business but having carried out checks into these entities, I often found hidden skeletons and things I was too anxious to continue to explore.

If you are seeking investment, which is often a necessity for tech companies scaling up, it is vital that you carry out your due diligence on what’s available, what the risks are and who the investor actually is.

  • Do they understand your sector?
  • Have they got the resources to add more money at a later date if that’s what you need?
  • Can you approach them if things go wrong?
  • Do they have competing interests in the marketplace?
  • What is your exit plan for them?
  • Have you also explored grants available for tech, innovation offerings, R & D credits and other means of funding?
  • Many people are often dazzled by the cheque and sign a contract…  but that’s just the start of the journey.

It is important that you consider whether you want to get involved unless you are certain you have aligned goals, exit plan and can handle a crisis together.

  1. Not being investor ready

When start-ups do find the right investor, a common pitfall is they are not investor ready because they haven’t got their house in order.

For example, they have not allocated and issued shares correctly. Their articles do not reflect the workings of the company. If an investor picks this up, it can make tech founders look careless and could scare off the investor.

“Be realistic and able to evidence all assertions”

More broadly other things that put investors off include inaccurate statements that have been put in writing, such as:

  • ‘This is unique to the market, no one else is doing this’. This is often a bold statement that just isn’t upheld or accurate.
  • ‘I don’t need a salary for 1-2 years; I can use 100 per cent investment on the business’; wrong! No one will invest in someone who can’t eat and pay their bills!
  • ‘My business is valued at £10 million because it’s going to be worth that in two years when we build our technology’. Can you support that with figures and market research? Be realistic and able to evidence all assertions.
  1. Not understanding how markets are regulated

Many businesses, especially those in disruptive markets, need to be regulated or are covered by additional regulations or laws.

Many fintech or ICO companies need to be regulated and choose to risk investment or token raises prior to taking proper advice or considering the proper process exposing you to an FCA investigation.

This is not an issue which only affects those in financial markets but includes among many others those in advertising, legal services/legal tech, recruitment, packaged holidays etc. Knowing your marketplace, sector and taking advice is essential prior to any public offering.

  1. Not taking experienced advice and creating an ecosystem

Tech developers are necessarily geared to be financial directors or HR managers yet running a business these roles become fundamental.  Not getting good advisers on board early enough is a common mistake. A good lawyer, accountant and tax adviser saves you money and pain at a later stage, especially if they can secure you EIS or another favourable structuring. A good FD helps secure investment and cash flow by managing the budgets and financial forecasts, they also add the commercial know-how into your passionate pitch deck.

Downloading templates; googling advice I appreciate happens because of the costs involved, but if you want your business to succeed you need tailored, personal advice and support. I know this is something I have benefited from greatly as I brought in consultants to help me and train me in my areas of weakness. Admitting these gaps in my knowledge and bringing experts in has helped me scale up.

  • Not having skin in the game and asking too little

If you are seeking investment for your tech business you need to start with securing some capital yourself or through your contacts. This shows investors you have faith in your offering, which then means they are more likely to match. This is something I hear frequently from equity investors, so try friends and family first. Another common mistake is asking for too little which cannot be sustained and then you have to go back to the platform or investor for money which could result in them losing faith in your financial model. You need to forecast and present realistic figures so you don’t ask for too much or too little.

  1. Don’t let the cat out of the bag

If you don’t have a signed NDA and if you discuss a potential or pending patent you could lose the rights. Discuss the details of your tech, design or offering in as much detail as you can to secure an investor or client, but where possible secure an NDA to protect your confidential trade secrets or ideas or Patents. They may be hard to enforce, often a concern of many so they don’t bother, but it’s a deterrent; it protects you Patents and it’s a good starting point for an injunction if someone tries to reproduce your tech.

Karen Holden is founder of A City Law Firm.

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

It shouldn't take a car crash for us to react. It shouldn't take sensationalist journalism and broadcasting to prick up your ear. It shouldn't take a parent losing their child for common sense to takeover the driving seat.

Society and the law are interesting bedfellows. One is usually reacting to the other in an eternal race to stay ahead. In the case of surrogacy, it could easily be argued that after 30 years since the Human Fertilisation and Embryology Act was introduced, society's views and understanding on the composition of a family has somewhat changed. Is surrogacy a law that time forgot? There was an update in 2008 to include same-sex parental couples the recognition deserved, but most academics agree that something based on a flawed assumption from the start cannot be corrected without a more detailed overhaul.

Recent research in a report commission by Surrogacy UK and comments from senior judges mark this as a thoroughly confusing area of law in dire need for reform. As a practitioner, I witness some marvellous contortions of law in order to fit with the most basic of principles: the best interests of the child. Words which mean one thing are manipulated almost beyond recognition to achieve the right result, provisions are extended and lawyers navigate their way through the corkscrew of statute, caught up in the hurricane of public policy. That judges tell us time and again the statute is not fit for purpose comes as no surprise, but it is a metaphorical car crash when they are forced to judgments, which are not only against in the best interests of the child but also the intended parents or surrogate too.

It was deeply upsetting to read the judgment in Re AB (Surrogacy: Consent) [2016] where the surrogate felt that she was not appreciated or acknowledged enough by the intended parents. She therefore refused to give her vital consent to the parental order which would have granted the intended parents the recognition as the legal parents. Despite not wishing to look after and care for the twins herself, having no biological connection to the children nor any apparent long term goal other than to thwart the intended parent's application so completely and effectively, the court was left muted and unable to proceed. Mrs Justice Theis, an extremely experienced judge in these matters, could do nothing other than urge the surrogate to remember why she undertook the selfless act in the first place and consider the situation from the point of view of these young children.

In a remarkable sense of foresight and acknowledgment of the issues, Baroness Barker and other peers of the House of Lords made similar observations in a debate on 14 December 2016 and also highlighted that without reform, the judges can only do so much contortionism. In May 2016, a judgement of incompatibility with the Human Rights Act was handed down because the right answer was just not possible, however they tried to square the circle. The current system causes incredible difficulties not just for those genuine surrogates who need the help to remove themselves as the legal parent, but also intended parents from those less cooperative surrogates where the best interests of the child have been forgotten.

I have seen in practice and met face-to-face the real misery and heartbreak that childlessness causes couples and individuals alike: Ovarian cancer stripping away your chances of a family; genetic anomalies causing impotence; sexual orientation causing people to give up on ever having a family; graphic road traffic accidents causing losses and pain beyond imagination. There are women in the world who are helping these people fulfil their dreams yet antiquated laws can cause a car crash. These individuals are committed and passionate about becoming parents and to give a child a loving home; not every case before the family courts is so uplifting.

As we forge forward to deal with this head on, are there risks to be considered? Of course there are. We would be blind not to acknowledge the need to protect vulnerable would-be-surrogates and any child, but there are risks in everything we do, including having children the usual way. To follow and quote the words of a cross-bench peer, Lord Berkeley of Knighton, "The imperative to procreate, next to birth and death, is one of the great evolutionary acts of being human--it should belong to all of us."

It is time for reform, and to empower the courts with the tools to reach the right decision for everyone involved and before there is a car crash from which we cannot recover.

Andrew Spearman is an award-winning Surrogacy Lawyer

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

The first working Monday of the year is dubbed Divorce Day by family lawyers, but if you’re in business with your partner, things can get complicated

A divorce is one of those things you don’t anticipate, plan or want to be party to. It’s tough to go through, especially when children are involved, but throw a business into the mix and there will be even more to consider.

In an ideal world, you will have a pre- or post-nuptial agreement, your house ownership will be clearly documented, and your business will have a partnership or a shareholders’ agreement. However, as a commercial lawyer I know this is rarely the case. Let’s be honest, ensuring you have the documentation outlining clearly allocated shares isn’t the most romantic proposition.

But divorces do happen and they can be bad for business if not handled correctly in the worst-case scenario, it could be the end of your business as well as your marriage. If you own a company with your partner, what do you need to know?

The 50/50 split

Without legal documentation, the starting point in family proceedings is that joint assets are divided 50/50. Alternatively, your shareholding in the business when you set up (even if it’s since changed) will determine the division.

If a business decision is required during proceedings - such as renewing a commercial lease or approving an incoming investor - and you both own the company equally (by law or by default), but cannot agree, this could end with the company being wound up.

We have acted for many clients in this situation. Often, one partner plays no real role in the business, but they use joint ownership as a means to negotiate for more in the divorce. In another instance, one client lost everything because he never documented loans he’d made to the company. When he and his wife divorced, his extra investment wasn’t recognised.

Hiding assets

I have seen a variety of tactics deployed by couples when personal relationships sour. Delayed account preparation for the proceedings is common especially where one partner is an active director, with a relationship with the accountant, and refuses the other party access. Theoretically, an accountant must remain impartial on behalf of the company, but in reality this can be very difficult.

Gifting away or liquidating assets of a company at a lower value ahead of anticipated divorce also happens a lot. One of the spouses could sell business assets to a friend, intending to re-buy them later, for example. Legal documents should specify that more than one signature is required to sell and specify how these assets are valued but often 50/50 owners don’t think about doing this.

Luckily, if assets are undersold, the family court has powers to reverse the transaction or “count in” the asset at the actual value instead so that no real loss is suffered by the other party.

How to protect your business

Divorce isn’t something we want to contemplate while happily married, but if you run a business with your spouse, you should consider:

  • Transferring all intellectual property (IP) rights to the company - IP can be one of the business’s most valuable assets. If jointly owned, one party will need to buy out the other if they want to use it post divorce
  • Drawing up a founders’ agreement, setting out what happens in the event of a dissolution or dispute Agreeing restrictive clauses to prevent the departing spouse from stealing clients, setting up in direct competition or sharing confidential information. Specifying who owns what shares and clearly documenting any loans to the company
  • Getting a pre- or post-nuptial agreement. These can be very persuasive during divorce proceedings, providing each party has had independent legal advice Making sure that your will mirrors these terms too, so that in the event of your death, it is clear how your shares or their cash value will be distributed
Amicable resolution

It is possible to find common ground during a divorce, providing both parties are open to finding an amicable resolution and some due diligence has been done in advance:

  • Have well-drafted contractual documents in place, covering the terms of the working relationship and how it can come to an end
  • Keep clear and distinct financial records, covering monies paid in and withdrawn. Clearly record any loans made to the company and document the terms for the repayment of that loan
  • Instruct lawyers and good accountants, who are known to resolve issues, rather than litigate
  • Consider exploring mediation and/or arbitration to discuss matters

Above all, any business founders should have their house in order to protect the enterprise and themselves. Clear legal documents mean that if a divorce does materialise, the business interests can be unravelled fairly, as easily as possible.

Karen Holden is the founder of A City Law Firm

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

It has been over 50 years since the decriminalisation of homosexuality started – and since then we have made some phenomenal steps forward when it comes to protecting the rights of people in the LGBT community.

Perhaps the biggest and most seminal piece of legislation in recent memory was the Marriage (Same Sex Couples) Act in 2013. But while this was a ‘game-changing’ law, it wouldn’t have been possible had it not been for a number of Acts that were passed over the last few decades.

As someone who sees these rights enforced on a daily basis, I often feel these other acts don’t get the attention they deserve which is why, for LGBT History Month, I’d like to look back and applaud some of these integral laws… as they are the bones around which everything else has been constructed.

Human Rights Act 1998

This remarkable Act allowed for fundamental human rights, including the right not the be discriminated against for sexual orientation. It was later used to also advance the rights of LGBTQ individuals both for legal protection in a relationship.

In 2000, a case relied on it to lift a ban on gay and bisexual people serving in the armed forces and was further instrumental in equalising the age of consent to be the same as opposite-sex partners.

Adoption and Children Act 2002

This Act wasn’t really advertised at the time but ground-breaking for same sex individuals as it was the first time in law that they were able to adopt. While the practice has ebbed away from discriminatory behaviour, it was still not expressly permitted.

This Act is one of the first that allowed the formation of same-sex families who had the right to be considered not just as a person who helped care for their partner’s child but as their actual legal parent too.

Civil Partnership Act 2004

This Act marked a significant change in legal standing for couples and allowed the formation of legal partnerships, the sharing of property and the ability to apply to the family courts for a fair resolution on separation. While no one likes going to court, previously LGBTQ couples had to rely on the stricter and more money-based property courts to seek remedy and protect their homes and future.

While it did not equalise marriage in name and still has some lingering faults – it nonetheless compliments the Adoption and Children Act.

Gender Recognition Act 2004

When it comes to progressive LGBTQ legislation, 2004 was a good year and this seminal piece of legislation cannot go without mention. While it has recently come under more severe criticism (and justly so, in my view) it nonetheless provided for the first time a mechanism which allows an individual to be recognised by something other than their assigned gender at birth.

Issues include the fact it did not provide any retrospective action, it caused problems for married couples and ignored the basic tenant about the individuality of each person going through the process. But while imperfect it was game-changing and not to be underestimated.

The Equality Act 2006

This was quickly followed up by the Equality Act 2010 which added gender reassignment as a ‘protected characteristic’.

While the Act has not eradicated employment discrimination (which unfortunately my employment team still deal with on a frequent basis), in other cases it has had an impact – such the ‘Gay Cake’ case in Northern Ireland too. In this instance a bakery refused to make a “gay cake” with the slogan “support gay marriage” because of their religious views.

The court upheld this was “direct discrimination”.

Human Fertilisation and Embryology Act 2008

Although surrogacy was permitted before, the Parental Order process was not available for same-sex male couples. The Act rectified this but also introduced the ability for same-sex female couples to be both named on the birth certificate as the legal parents of a child after using a known donor. This was allowed even if they were not in a civil partnership, provided they went through a clinic and filled the correct forms.

With this Act and the change it brought, LGBTQ families have really flourished and I now meet couples applying for recognition of legal parenthood with increasing frequency. As recently as 14 February, Tom Daley and his partner Dustin Lance Black announced they’re having a family. I am sure everyone will wish them well with parenthood, but it is also clear to show that same-sex families are now in the mainstream and here for good.

That happened though because of this Act and, despite its long-winded title, it should not be underestimated.

Andrew Spearman is a leading family and LGBTQ rights lawyer, and a Director at A City Law Firm (www.acitylawfirm.com).

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

From 25 May 2018 the Data Protection Act 1998 (DPA) will be replaced by The General Data Protection Regulation (GDPR), and it will bring important changes to the ways data is stored and processed by businesses. The introduction of GDPR is designed to set clear rules for businesses to follow when collecting and storing personal data, it also allows everyone to understand their rights in relation to the information held about them. The new regulation was created as a reaction to increased internet usage and sales of personal information, allowing consumers more power over their personal data.

The new law will bring data protection in the UK in line with the rest of the UK and nothing (not even Brexit) will stop it – So it is best to start preparing now! Your business must have strong policies in place to avoid scrutiny and potential fines. This article will highlight some of the key elements of the GDPR, and the best practice for companies.

What are the new GDPR principles?

The general framework of GDPR is similar to DPA, and the level of compliance is dependent on how much, and the type of data collected. In essence – the more data collected and processed by your company, the more compliance is required under GDPR.

You must, however, still afford privacy protection, notification and consent and protect the information by secure storage, regardless of your business’s size. GDPR places a larger focus on protecting an individual’s rights about their data, therefore when companies collect and process the data, they must also justify the legality of it.

What is meant by ‘Data’?

An individual’s personal data can relate to their name and address, but can also include fingerprints, DNA, recorded calls, date of birth and now has become more stringent, including any information that can be traced back to a single person. All of this information will be covered and protected by the GDPR.

How does this affect recording phone calls? And how can I ensure I am doing this legally?

If you record phone calls you must fulfil any of the following conditions to ensure you are doing so legally:

  1. Receive consent from the individual(s) in the phone call to record.
  2. Justify the necessity of the recording, i.e. to fulfil a contract, or for legal requirements.
  3. It is necessary to protect the interests of one or more participants.
  4. The recording is in the public interest, or necessary for the exercise the official authority.
  5. It is in the interest of the recorder, only overridden if they conflict with the interest of the participant of the call.

When a business is using call recording to monitor customer service, they are still left to fulfil the first condition to be fully compliant. The fifth condition may also apply as it could be argued that staff quality assurance outweighs the interest of privacy.

So, what does this mean should you want to continue recording phone calls? Under the DPA, when a recording takes place the individual must be informed of the purpose and how the information will be processed. If the participant continued the call consent was assumed, and this was acceptable and common practice. The GDPR implements tighter regulations, meaning implied/assumed consent is no longer enough. There must be express consent given, either by recording verbal consent or having AI terminate the call if consent is not given.

Rights to Access Data Have Also Changed.

Individuals will now have absolute access to any information stored about them, and this will need to be identified, retrieved and provided to them upon request. Therefore, as a business you must implement a an efficient method of doing this upon request. In addition, should the individual request to have your details removed you must do so with immediate effect. Any policies that are put into place to ensure this is done must be co ordinated with your IT and call recording provider to ensure you can fulfil your claims.

Compliance

Business must be able to actively display their compliance to the new rules under the ‘Principle of Accountability.’ The GDPR stresses the importance of implementing data protection systems with immediate effect. Creating an extensive policy is not going to be useful if your staff and providers are not going to be able to fulfil the obligations. Having an honest and realistic policy will be most effective, and will be easier to demonstrate should you need to prove fulfilment.

In order to implement any policy effectively there are several steps that must be completed. Including, drafting policies and protocols, and training staff to make them fully aware of the new provisions followed by careful management and implementation.

Penalties

Along with the new policies implemented there are also new penalties designed to deter and punish organisations committing further breaches. Under the DPA, organisations could be fined up to £500,000. However, under the new GDPR fines can range from 2-4% of global turnover, depending on how severe the case was. These fines are designed to have a large impact on non-compliant companies, therefore it is important to act now.

By Karen Holden, Founder, A City Law Firm

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

The Data Protection Act is about to be changed becoming tougher, and only about a third of businesses are ready for it - particularly those in the arts and creative industries. It will bring the UK into line with Europe and nothing, not even Brexit, will slow its implementation. Lawyer Karen Holden, who has made a speciality of the law around data protection, explains

On May 25 the General Data Protection Regulation (GDPR) will replace the current Data Protection Act 1998 (DPA). It will carry a new set of rules and huge changes on how data is being stored and processed by companies and enterprises, and the new development is going to give citizens more power when it comes to personal data. The change has come about due to increased online activity, and it will mean severe repercussions for businesses that do not follow the new policies and rules so it is better to start preparing now.

The design of GDPR not to dissimilar to that of the DPA, but the level of compliance is going to be dependent on how much data, and the type of data, is collected. You must, however, still afford privacy protection, notification and consent and protect the information by secure storage, regardless of your company's size. GDPR places a larger focus on protecting an individual’s rights about their data, so that when companies collect and process the data,they must also justify the legality of it.

Someone's personal data could simply be their name or address, but could extend to details including fingerprints, DNA and recorded calls. Under the GDPR, personal data will refer to any information that can relate to a single person. All of this information will be covered and protected by the GDPR.

If you record phone calls you must:
  1. Receive consent from the individual(s) in the phone call to record;
  2. Justify the necessity of the recording, i.e. to fulfil a contract, or for legal requirements;

  3. Protect the interests of participants;
  4. Be sure the recording is in the public interest, or necessary for the exercise of the official authority.
  5. Be aware that the interests of the recorder will be overridden if they conflict with the interests of the participants in the call.

Under the DPA, when a recording takes place the individual must be informed of the purpose and how the information will be processed. If the participant continued the call consent was assumed, and this was acceptable and common practice. That is no longer enough - the GDPR implements tighter regulations, and there must be express consent given, either by recording verbal consent or having terminating the call if consent is not given.

Rights to access data are also changing. Individuals will now have absolute access to any information stored about them, and this will need to be identified, retrieved and provided to them upon request. Therefore, as a business you must implement an efficient method of doing this on request. In addition, should the individual request to have your details removed you must do so with immediate effect. Any policies that are put into place to ensure this is done must be co-ordinated with your IT and call recording provider to ensure you can fulfil your claims.

Businesses must actively display their compliance to the new rules under the “Principle of Accountability”, and the GDPR stresses the importance of implementing data protection systems with immediate effect. Creating an extensive policy is not going to be useful if your staff and providers are not going to be able to fulfil the obligations, so having an honest and realistic policy will be most effective and will be easier to demonstrate if you need to prove fulfilment.

In order to implement any policy effectively there are several steps that must be completed, including drafting policies and protocols, and training staff to make them fully aware of the new provisions followed by careful management and implementation.

And there be penalties for breaches, and organisations could be fined up to £500,000 or, under the new GDPR, fines can range from 2-4% of global turnover, depending on how severe the case was. These fines are designed to have a large impact on non-compliant companies, so it is important to act now.

We believe that the best place to look when deciding what improvements and changes need to be made you need to have a full understanding of your business, its operations and the date you really need to be collecting. All polices created should be bespoke on a client by client basis, on what can be achieved, based on size, budget, suppliers and compliance.

Karen Holden is the founder of A City Law Firm

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

There has been an incredible revolution over the past 100 years, which has transformed the lives of women. Opportunities have been created, expectations have been surpassed, and women are working to (successfully) achieve equality.

Changes in the law have empowered women to gain the right to vote, right to an education, right to divorce, the right to legal abortions, as well as provide them with a platform to advocate for issues that were not previously addressed.

We asked award-winning solicitor and founder of A City Law Firm Karen Holden to explain exactly what happened over the last 100 years, and why the changes were so important.

1. Representation of People Act, 1918

Women’s suffrage was a movement which fought for women to be given the ability to vote in elections – a right that was previously dismissed. It has been 100 years since the right to vote came into force.

However, despite the passing of this legislation, and the success in fighting for equality for women, men’s rights still surpassed that of females. Only women over the age of 30 who owned a house or were married to someone that did possessed the right to vote. Ireland and Azerbaijan were the initial states to grant women the right to vote in 1918, which outpaced that of the UK’s progress on suffrage.

2. Matrimonial Causes Act, 1937

The Matrimonial Causes Act 1937 allowed either party the ability to file for a divorce. Prior to its enactment, women had no power to divorce from their partners, unless they could verify that their husbands had partaken in adultery or proven offences that violate the sanctity of a marriage, such as cruelty or incest. This was the start of modernising the divorce laws and transformed the lives of women.

3. Abortion Act, 1967

The 1967 Abortion Act and the 1946 NHS Act have impacted women’s rights to healthcare. It legalised abortions across Great Britain up to 28 weeks of pregnancy and permitted the National Health Services to suggest them to patients.

However, in 1990, the Human Fertilisation and Embryology Act amended this so that abortions were not legal after 24 weeks and that two doctors must both certify the need for an abortion. This was a landmark position for women, as this ground-breaking legislation expanded women’s rights to healthcare and control over their own bodies.

4. NHS Family Planning Act, 1967

Similar to that of the right to legal and safe abortions, the right to contraception was another defining change. When first introduced, the pill was only offered to women by the NHS who were older and did not want any more children. The government did not want to be seen as promoting promiscuity. However, this was amended through the NHS (Family Planning) act 1967, making contraception readily available.

5. Equal Pay Act, 1970

The disparity between men and women’s income has become a major point of contention throughout the last century. However, as of 4 April 2018, all organisations in Great Britain (excluding Northern Ireland) that employs over 250 individuals, must publicly declare, and report their gender pay gap to the Government Equalities Office (GEO).

Under this new regulation, companies are also required to publish the percentage of men and women that receive bonuses. As per the Equal Pay Act 1970 and the Equality Act 2010, it is considered unlawful for companies to pay individuals undertaking the same role or ‘work of equivalent value’ differently on the basis of their sex.

6. Shared Parental Leave, 2015

The introduction of the revised parental leave legislation enables both parents to take time off regardless of their gender. This legislation came into force in April 2015. This allows for greater flexibility when arranging maternity or paternity leave, as parents can take it simultaneously or separately for a year after a child is born.

7. Same Sex Adoption, 2002

It was in 2002 that the UK parliament passed legislation in the Adoption and Children Act 2002, that enabled same sex and unmarried couples to adopt children. Prior to the reform in December 2005, unmarried individuals were made to adopt children separately, giving their partners minimal parental rights.

8. Marital Rape Deemed Unlawful, 1991

Marital rape has been an alarming and particularly distressing topic. It is the act of non-consensual sexual intercourse within a marriage, that is now declared as domestic violence and sexual assault. Historically though, this conduct was considered lawful.

In other words, marriage meant an implied consent to sexual intercourse. However, this was completely overturned in the breakthrough case of R V R [1991] UKHL 12, which condemned the possibility of a husband’s immunity to non–consensual intercourse and criminalised it.

9. Sex Discrimination Act, 1975

In 1975, the Sex Discrimination Act UK declared it to be illegal to discriminate against men and women in work, education, and training on the grounds of marital status or sex. This was a significant act demanded by the women’s movement.

Women’s rights and equality have changed and strengthened massively over the past 100 years but culturally, we still have a long way to go for women to see a genuine gender balance and have the confidence to seek equal pay and promotions.

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

WE HAVE ALL READ THE CHALLENGES MADE AGAINST UBER, DELIVEROO, ADDISON LEE AND PIMLICO PLUMBERS BY MEMBERS OF STAFF.

The issue is not new and boils down to whether certain self-employed staff should be considered as employed (and subject to employers NI) and in turn whether they should then have employment rights and benefits. We watch the numerous cases and appeals with great interest.

Then there was the BBC presenter Christa Ackroyd, who has been held liable for tax in excess of £400,000 because the Courts considered her to be an employee of the BBC even though her services were being paid through a separate limited company. This is not a novel issue and one which hit the IT industry particularly hard over the last couple of decades. But this is being seen as an important victory for HMRC as it is the first time in 7 years they have won a so called IR35 claim.

So what is the position?

The tax rules that govern this situation are called IR35 (so called as it was published by Inland Revenue – now known as HMRC). This is a tax law came into effect in April 2000. The aim was to combat tax avoidance by workers who supplied their services via an intermediary, usually a limited company, but who would be an employee if the intermediary was not used. Such workers are known as ‘disguised employees’ by HMRC.

What is a disguised Employee?

This is where an organisation engages workers on a self-employed basis, usually through an intermediary company, although not all the time, rather than using an employment contract. This set up is often used as it allows the ‘employer’ to save a significant amount of money. They do not have to pay employers’ NICs or use payroll software deducting and accounting for PAYE deductions. Additionally, it also means they usually do not offer any employment rights or benefits such as holiday, maternity/paternity leave or sick pay.

Also they do not have to concern themselves with unfair dismissal claims or redundancy payments, they simple serve notice if the project has come to an end or they no longer require the person’s services. Often the employees can make tax savings too, but some do lose out on the rights and benefits they would normally wish to or be afforded.

Changes to IR35

New rules came into effect on 6th April 2017 regarding the assessment process for IR35. These were to determine whether a contractor working via a services company for a public sector client fell within IR35. The changes now see sector organisations assume responsibility for deciding whether or not limited company contractors should be taxed in the same way as salaried workers where this responsibility previously laid with the contractor themselves.

Significance of IR35

If a worker is found to be a ‘disguised employee’, in other words contractors who do not meet HMRC’s definition of ‘self-employed’, the financial impact of IR35 can be significant. The result is that they will have to pay income tax and National Insurance Contributions (NICs) as if they were employed and this can reduce net income by up to 25%. HMRC can also come after the employer for the money that should have been deducted at source. Additionally, there may be interest and penalties for late payment.

Christa Ackroyd

The significant financial consequences of being caught by IR35 can be seen in the case of Christa Ackroyd. The UK tax tribunal ruled on 15 February that her contract with the BBC should have been subject to IR35 legislation and that she was in fact a ‘disguised employee’. Although the judge ruled that she had not intentionally avoided tax, she suffered significant financial consequences.

Some of the main indicators in her case which led to the Court ruling she was a ‘disguised employee’ was that that her role was continuous and steady, that the BBC had ultimate say over what services her limited company would provide, and that her contract restricted her from providing services to other companies.

Implications of the case

It is highly probable that we can expect a wave of litigation to result from similar cases and more and more organisations to be investigated concerning the contractual arrangements and status of its employees. Reports have already revealed that several other BBC engagements are under investigation.

How can businesses determine whether a person should be an employee or a self employed contractor/subcontractor/consultant?

There are some measures you should have in place prior to starting the relationship:

  1. A good contract will have all the legal / tax requirements to ensure that you satisfy the rules on substitution, level of controls, who pays tax etc. It should also have an indemnity if the worst happens and HMRC come after you as the business for contractor’s taxes.
  2. A good Contract will seek to hold you harmless, as much as possible, regarding tax implications
  3. You should make sure you receive invoices and have a clear project based or hourly or daily payment system that combats any concern that they are actually employees
  4. Where appropriate you should make sure they carry their only professional insurance
  5. Staff should bring their own or rent equipment
  6. Lack of work or end of a project should enable the contract to lapse or be terminated
  7. They should be permitted and not restricted from earning income elsewhere or be forced to be exclusive to your work force
  8. You should not, where possible and suitable, seek to force working times, uniforms or employee policies on them
  9. Do not pay them holiday or sick pay
  10. Allow them to be able to substitute themselves for someone else if suitable.

Ultimately HMRC and the Courts look at the actual facts of any situation to determine the relationship between the parties. It is important you keep clear and accurate records and remain careful that you do not blur the lines.

KAREN HOLDEN, FOUNDER – A CITY LAW FIRM.

Read Full Article
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

This month my company (A City Law Firm) marked our ten-year anniversary, which has made me think back to our first year, how we started and some of the early mistakes we made. For one thing, within a year of our launch, we had to restructure the entire business and there were so many hurdles we had to overcome – in the early days it really was about survival.

What’s fascinating is many of the mistakes we made back in 2008 are the same mistakes that many tech start-ups make time and time again. I know this because over the past decade we have represented hundreds of tech businesses – from start-ups to big businesses – and I find that time and time again the same issues crop up.

So what are they? 1. Not having a strong shareholders agreement – or discussing, formulating and documenting the business plan with co-founders

I intended to found my business with three others, however, I soon realised that our goals and objectives were sadly not aligned; our work ethics were very different and our long-term motivations out of sync. Luckily, I had drafted a very good partnership agreement so managed to break free from what would have been a disastrous relationship. Luckily this enabled me to continue with A City Law Firm with just me at the helm, but not all businesses I have encountered can say the same.

Not only do you have to be careful to choose the right partners, but you need to clearly document your goals in a shareholder’s agreements. This means that as founders you can build upon the platform you have created together, but if it goes wrong you have a means to address the problem not just having to wind up the company. The key is choosing the right partners, talking candidly and asking the tough questions at the beginning.

2. Having poor contracts or no contracts – hitting your cash flow

You need to understand your marketplace, your competitors and what you need financially to be able to grow.

Cash is king. Be realistic with budgets and prices and ensure your contracts protect you - not only with clients but with employees, suppliers and contractors. It is fundamental that you closely monitor payment timescales with clients, especially if you are working on large projects. Corporate clients may expect 60 – 90-day payment terms but your sub-contractors will not.

It’s also important you pay yourself a reasonable salary, especially when you are seeking investment, otherwise, if the founder is distracted, the business is not going to progress. Any investor will want to see this factored into any business plans and financial models.

3. Not having good staff contracts or options to incentivise them

A large part of any company’s budget will be put towards recruitment, training and retention of its employees. Despite this, there is a real risk that those key people could walk out of the door leaving you without the requisite skill pool you need, but worse yet, there is a real possibility that they may also take all of their knowledge of your business and pass it to a competitor.

Many businesses focus on many things but staff retention and protection against staff competition is often neglected. This is especially key in the tech world as the opportunities for work are so great.

From a legal standpoint, it is important to:

  • Have tight employment, contractor, consultancy and sub-contractor contracts in order to protect your IP and confidentiality. It is also important to have restrictive covenants to avoid staff taking your know-how in terms of clients, IP or staff to a competitor or setting up on their own.
  • Consider EMI options as they can give staff the feeling of being part of the fabric of the business and as you succeed so do they in terms of profit sharing without actual cost in the short term to you. This also can attract more specialist experts to the team where cash is not readily available ;

Overall though the key is to find ways to incentivise and look after your team. If you can communicate your vision to the team so that they are working side by side with you, this inspires loyalty and dedication as you are all working from the same plan with the same goal.

4. Intellectual Property & the mistake of that ‘handshake deal’

IP ownership can only be granted or transferred (“assigned”) in writing. As such, if your freelance coder or developer has no contract with your business then they could actually own the IP that they have helped design, not you.

If there is a dispute, then they could hold this to ransom causing a costly dispute or loss of your code or design. You need to ensure you have checked these contracts carefully and that you actually have one carefully drafted in your favour. Many tech companies work with friends and often make arrangements based on goodwill, but when a dispute arises without a contract you are at the mercy of the designer.

If you are bringing your designing or coding in-house, then it is especially key to convince an investor you have secured long-term staff and that the IP ownership will effectively transfer to you.

Many businesses fail to check that their proposed company name or branding is free to trademark. This should be carefully checked before a large budget (or large budget relative to the size of your business) is set aside for branding and marketing as otherwise, you may find yourself having to start all over again.


5. Rushing to Investment and giving up equity in the company

I managed to self-finance my business throughout without taking in partners or investors. I did consider these at points along the way and even had offers of mergers and partners coming into the business but having carried out checks into these entities, I often found hidden skeletons and things I was too anxious to continue to explore.

If you are seeking investment, which is often a necessity for tech companies scaling up, it is vital that you carry out your due diligence on what’s available, what the risks are and who the investor actually is.

  • Do they understand your sector?
  • Have they got the resources to add more money at a later date if that’s what you need?
  • Can you approach them if things go wrong?
  • Do they have competing interests in the marketplace?
  • What is your exit plan for them?
  • Have you also explored grants available for tech, innovation offerings, R & D credits and other means of funding?

Many people are often dazzled by the cheque and sign a contract… but that’s just the start of the journey.

It is important that you consider whether you want to get involved unless you are certain you have aligned goals, exit plan and can handle a crisis together.

6. Not being investor ready

When start-ups do find the right investor, a common pitfall is they are not investor ready because they haven’t got their house in order.

For example, they have not allocated and issued shares correctly. Their articles do not reflect the workings of the company. If an investor picks this up, it can make tech founders look careless and could scare off the investor.

More broadly other things that put investors off include inaccurate statements that have been put in writing… such as:

  • “This is unique to the market, no one else is doing this”. This is often a bold statement that just isn’t upheld or accurate;
  • “I don’t need a salary for 1-2 years; I can use 100% investment on the business”; wrong! No one will invest in someone who can’t eat and pay their bills!
  • “My business is valued at £10 million because it’s going to be worth that in two years when we build our technology”. Can you support that with figures and market research? Be realistic and able to evidence all assertions.
7. Not understanding how markets are regulated

Many businesses, especially those in disruptive markets, need to be regulated or are covered by additional regulations or laws.

Many fintech or ICO companies need to be regulated and choose to risk investment or token raises prior to taking proper advice or considering the proper process exposing you to an FCA investigation.

This is not an issue which only affects those in financial markets but includes among many others those in advertising, legal services/legal tech, recruitment, packaged holidays etc. Knowing your marketplace, sector and taking advice is essential prior to any public offering.

8. Not taking experienced advice and creating an ecosystem

Tech developers are necessarily geared to be financial directors or HR managers yet running a business these roles become fundamental. Not getting good advisors on board early enough is a common mistake. A good lawyer, accountant and tax advisor saves you money and pain at a later stage, especially if they can secure you EIS or another favourable structuring. A good FD helps secure investment and cash flow by managing the budgets and financial forecasts, they also add the commercial know-how into your passionate pitch deck. Downloading templates; googling advice I appreciate happens because of the costs involved, but if you want your business to succeed you need tailored, personal advice and support. I know this is something I have benefited from greatly as I brought in consultants to help me and train me in my areas of weakness. Admitting these gaps in my knowledge and bringing experts in has helped me scale up.

9. Not having skin in the game & asking too little

If you are seeking investment for your tech business you need to start with securing some capital yourself or through your contacts. This shows investors you have faith in your offering, which then means they are more likely to match. This is something I hear frequently from equity investors, so try friends and family first. Another common mistake is asking for too little which cannot be sustained and then you have to go back to the platform or investor for money which could result in them losing faith in your financial model. You need to forecast and present realistic figures so you don’t ask for too much or too little.

10. Don’t let the cat out of the bag

If you don’t have a signed NDA and if you discuss a potential or pending patent you could lose the rights. Discuss the details of your tech, design or offering in as much detail as you can to secure an investor or client, but where possible secure an NDA to protect your confidential trade secrets or ideas or Patents. They may be hard to enforce, often a concern of many so they don’t bother, but it’s a deterrent; it protects you Patents and it’s a good starting point for an injunction if someone tries to reproduce your tech.

Karen Holden is Founder of A City Law Firm

Read Full Article

Read for later

Articles marked as Favorite are saved for later viewing.
close
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Separate tags by commas
To access this feature, please upgrade your account.
Start your free month
Free Preview