The legalities of running your own business with Natasha Minchella // Expertise Session Recap
This is a quick recap of our last Expertise Session with Lawyer Natasha Minchella. It was an incredibly informative and fun night, so I thought I would note down Natasha’s talk whilst it was going on so I could upload to here in case you couldn’t make it. Excuse the manner of language here, I've tried to make it vaguely readable but some sentences may still be in noteform!
The legalities of running your own business can be an overwhelming, scary thing. I know that before this Expertise Session, I avoided the topic like the plague (apart from contracts and terms + conditions) because I knew I wasn’t doing certain things and I thought if I ignored it, it would go away.
But, the thing you need to work on before your contracts, IP etc is your mindset; changing your mindset against your legal foundations. They’re not scary, they’re just necessary, and once they’re in place, you’re going to feel a whole weight lifted from your shoulders.
As creative people, we don’t naturally embrace those masculine factors in business. We avoid them until we have one nightmare situation and then we eventually learn, but those niggles in the background taint all the wonderful stuff you want to do. It’s liberating to get your legal bits in place. You can sleep soundly at night.
Place a proper value on your work. Don’t be too generous. Have structures in place to enable you to be more robust with piss-taking clients.
We focus on getting out products/services out there, but not our legal structures. Getting all your correct legal documents in place it gives the right impression to people. It gives you a lot less hassle in the future.
A contract is an offer, a consideration. Once signed and agreed to, it’s an agreement. If you’re selling products or services, you need to have a contract in writing or verbal agreement. Natasha highly recommends that you make sure the contract says exactly what you want it to say so everything is clear and nothing is assumed. We have a natural resistance to getting this place, just because we feel that most people are thinking the same as us, but it’s something we need. It’s like someone puts off the music and puts the lights on full when someone mentions a contract. A well-written contract is a great resource for everyone, for you and for your client.
Things go wrong and the likelihood is this will happen more as you grow. Getting your contract in place is great discipline as it makes you think through everything. It protects you and your client, tells each party exactly what you’re going to do and what they’re going to do.
Have contracts even if working with family and friends. It takes the emotion out of things if they go wrong.
Difference between 1-2-1 contracts and terms and conditions
1-2-1 contracts are best for bespoke work and complex projects. There’s more of an opportunity to negotiate. Your clients will more likely read it. In a court of law, judges are easier on suppliers with a 1-2-1.
If you are selling in bulk, it might be more appropriate to have terms and conditions on a website. If you’re selling online, you need T&Cs on your site. They need to see them at the right stage, before they buy (a pop-up where they have to tick to say they agree to the T&C’s is best). They have to confirm that they’ve seen and agree to your T&C’s. You don’t negotiate online terms and conditions. Judges are harder on suppliers with T&C’s.
Get really clear on your policies, your refunds, your exchanges etc.
If you’re selling to consumers (not stockists), you need to be aware of the Consumer Legislation Act.
All T&C’s must include a cooling off period. If you’re selling goods and services, and someone pays upfront, there’s a 14 day period to change their mind. You have to refund them if they change their mind. If they start your services, they lose the right. They may be entitled to a proportionate refund. You need to find out what your obligations are.
If people pay via paypal and ask for refund, paypal freeze that money. But if you have a contract in place, you will have more of a chance of getting that money.
What you need on your website
Terms of supply- These are for you if you sell things. It is the customer contract that they need to agree to before they buy. Get one drafted up by a lawyer. It’s fully worth investing in something that is on brand and in line with your business values.
Don’t copy what you find on the internet. Copyright belongs to whoever created it, but it’s also rubbish a lot of the time. Just because it’s on the internet and someone is using it, doesn’t mean it’s correct, may be out of date, and it may be illegal.
Important things to include in your contract are what everyone is doing, payment, what you going to paid, how, what happens if it’s late, intellectual property, what people can and can’t do to materials being sent to them.
Liability- you need to be limiting your liability to what is reasonable to your services and your products. Say you created a website and it was late, you accept you messed up, you might be happy to give a refund but you don’t want to open up other compensations.
Patents- these are to do with inventions. If you invent something technical or a gadget, that would need to be patented. These are expensive, lengthy and not really relevant to online shop owners, makers etc.
Trademarks- A trademark is any sign that can be represented graphically and is capable of undertaking goods and services from. This could be a name, a logo, a strapline, a name of a programme or product or service. You will want to protect that and stop other people from using it. Even if you don’t register a trademark but you spend time on that venture, you have an unregistered trademark and you might be able to stop people, but it’s a lot more difficult compared to registered. Register your great name or logo or strapline as soon as possible! When registering online, you register for different classes. It is a bit approximate and may be more than one thing, but it’s more money for each class. There is a service called The Right Start service where you pay £100 upfront and then submit the form, and they tell you if there’s anything wrong.
With both ™ and Copyright, make it clear to people what they can and can’t do in an obvious way.
Copyright- Copyright comes into being naturally, you don’t really have to do anything in the UK. There is no IP in an idea, but you can protect a visual representation of an idea; anything you’ve written, drawn etc. Natasha would recommend that if you produce anything, add the C symbol, name of the entity, the year it was created. With goods, design rights, you have unregistered, registered and community design rights. CD rights are trying to make it easier for people to get protection on their designs. They can’t be surface things, however, it has to be specific design. Community design rights are better than English Design rights as that is all about function rather than being wider.
Prevention is better than cure. Having a trademark and a contract will put you in a great position.
Other things you might want to think of as you’re upleveling
If you expand your team, e.g start using a VA, make sure you have a contract with anyone you work with, any independent contractors. You need make sure an agreement is in place over anything you ask them to do and pay for. They sign the IP over to you. Indemnity for tax clause, they’re not an employee.
Three key things from this Expertise Session-
- Feel positive about legal foundations.
- Consider assets regularly: what's of value of me, what do I want to protect.