Liquidation and Bankruptcy

Some local businesses and individuals can get into financial difficulties. On 21st December, Travelscope Holidays Ltd ceased trading as it was unable to meet its liabilities. In this case, those traveling will have protection as the company is a member of ABTA but many local businesses find they are last in line for payments when a customer goes out of business.

Matthew Bailey says “We can advise you on how to protect yourself against suppliers and customers going out of business. Obviously, protection includes having written terms and conditions of sale which clearly apply and under which ownership of the goods you sell to customers does not pass to them until payment is made (known as a retention of title clause). The clause may also give you a right of entry to their premises to retrieve your goods if they go out of business. These clauses need to be carefully drafted to avoid the clauses being classed as a “charge” or mortgages. Such charges are only valid if registered at Companies House like any other mortgage so avoiding rending those provisions applicable is important.

We can also advise you on payment clauses in contracts, letters of credit for foreign supplies, performance bonds and other legal protection measures. In addition, if you are in difficulties, then we can provide you with all the advice and guidance you need. Individuals go bankrupt and companies go into liquidation. However, there are other options too such as IVA – individual voluntary arrangements with creditors for individuals, and administration instead of liquidation for companies. We also advise on clauses in commercial contracts which deal with situations of liquidation and when contracts can be terminated in such a case. The earlier advice is sought the better. It can often be wise to be in charge of the winding up of a business rather than leaving it to the creditors to apply to wind the business up.

Contact Matthew on 01329 822333

Protect your Inventions

Many local businesses need better protection for their valuable commercial inventions. In December, new patent rules came into force simplifying the patent system. Patents can be registered for up to 20 years for new products or new processes.

Roger Hahn says:

“Some companies let inventions go without bothering to register them as patents, which is a waste. Others find inventors disclose the invention too soon because they have not signed confidentiality or non-disclosure agreements (NDAs) before discussing the invention with a possible business partner. We can draw up NDAs for you and advise on how best to protect your business’ intellectual property.

Another recent change is a new patent scheme run by the UK Intellectual Property Office, whereby customers can now request an online certified copy of their patent applications on line. On 13th December 2007 the revised European Patent Convention came into effect. It makes it simpler to apply for patents too where registration is needed in more than one country in the EU.

“It is wise to have written agreements with collaborative partners dealing with ownership of patents and other intellectual property rights and to ensure in commercial contracts, and even standard conditions of purchase, that it is made clear which party will own any resulting intellectual property rights. Although employers will own patents in inventions made by employees in the course of their normal duties or duties specifically assigned to them, if the individual is self employed that does not apply and it is wise to have written contracts dealing with this. We can draw up these for you. Contact us for further information”.

Call Roger on 01329 822333

Legal New Year Resolutions

As well as the usual personal New Year resolutions to lose weight, get fit or whatever, we suggest that you also consider making some legal New Year resolutions which are likely to be more enduring than most New Year resolutions tend to be.

Ian Robinson suggests the following personal resolutions:

1. Make a will so that you leave your property to those you choose, rather than a list of relatives that inherit. If you die with a spouse and there is no will, the spouse does not receive all the estate in many cases unless you make a will saying so.

2. If you live with a partner, draw up a written agreement about property and money. A popular myth is that a common law spouse has legal rights as if the couple were married but that is not so under existing law. However, plans to change the law to give new rights to cohabitants may cause some to reconsider moving in with a partner. Consult us on the impact of the proposed changes.

3. Consider whether properties you own with others should be held in joint names (which means if you die they receive your share) or as “tenants in common” which means you can leave your share to whomsoever you choose.

4. If you work with a partner, whether in a partnership or through a limited company, draw up a partnership agreement or shareholders agreement dealing with matters such as how much effort both parties put into the business, what profit shares are taken, what happens if one of you is ill or dies or wants to leave and what will happen if an offer for the company is made.

5. If you trade in business, draw up some standard conditions of sale and purchase and formalise any informal distribution, agency and licensing agreements so that everything is clear. This reduces legal costs if a dispute arises later, as the written terms protect you. If you have existing standard terms, have them checked to ensure they reflect the latest legal position.

6. Check your business’ compliance with recent changes in areas such as data protection and employment law, competition law and intellectual property. An annual legal compliance health check is well worth undertaking.

7. Check that all staff are properly putting into force legal instructions e.g. some Purchasing Department staff do not reject suppliers’ standard terms of trading and fail to send back the buyer’s terms. Regular training for this kind of staff can be provided by lawyers and others.

8. Deal with legal disputes quickly and early to ensure they are resolved without the need to go to court, which is risky and expensive. Consider mediation of disputes rather than formal arbitration or court action and always balance risks and possible legal costs against potential rewards.

If you need legal help in any of those areas contact us on Ian on 023 9286 2424