There are many bits of legislation businesses we have to adhere to, however we’ve selected four areas that will most certainly be of interest to both businesses and consumers’ rights.

1. Carelessly leaking personal data  

What Happens To Your Personal Data

There is not a direct legal right to privacy in the UK, so it is easy to overlook some of the legal traps regarding privacy issues. Data protection is a risky zone, because your clients can still sue you against The Data Protection Act 1998. Under this legislation, business is constrained to process all personal data by eight principles, which are mainly about treating personal data for a right purpose, and not to transfer them beyond the European Economic Area.

Particularly, if your business touches upon data re-selling, such as medical research, you should make sure all personal information are packaged anonymously before sending them out.  For more details of the Data Protection Act 1998, you may go to this link:


2. Losing the Intellectual Property (IP)

Every business owns some form of IP, be it a logo design, an invention, or a training method. For example, Coca-Cola claims to own the patent to their secret recipe. In the engineering industry, IP could even be the very core of an entire business. Losing it means giving others a chance to overwrite everything your company has built. Therefore, careful protection for the IP is vital.

What you have to do is to identify your original idea, then register your business with the Intellectual Property Office (IPO). In the UK, filing a patent costs around £230 – £280. Do not reveal your invention too early in order to gain bigger success in the patent application. Contractors or people affiliated with the business may need to know the details of the IP. In this case, make them sign the ‘Non-disclosure Agreement’ to increase protection.

One thing to note is, unless shareholders agree with the contrary, you should register the IP to the company but not to one person, so to lower the risk of patent holders running away. Another article we’ve written gives you a brief guide  explaining Patents, Trademarks, Design Rights and Copyrights.


3. Writing legally invalid exclusion clause 

First timers in the field may not realize the importance of declaring exemption of liability. It protects the business from possible unfair legal responsibilities related to their goods and services. But even you are aware enough of this legal procedure; you may find it difficult to do it right without sufficient professional guidance.

Naturally you will hire a solicitor to write out the exclusion clauses. However in case you want to save the budget, just remember it is always better to write more than less. Most importantly, write in multiple clauses, because as long as one condition mentioned appears to be problematic, the whole clause will become voided. Including one condition in each clause is the wise move.

Note that the exemption of liability is not omnipotent. If injury arises from negligence of the producer, the liability is non-exemptible. You may find reference from the Unfair Contract Terms Act 1977, which serves to protect consumers.


4. Drafting a Shareholders Agreement too late  

For all businesses whom are incorporated – this point is relevant to you. Again, there is no legal requirement to construct a shareholders agreement. And it usually comes down to the lowest priority to people who just start their business. Indeed, it is essential to clearly define shareholders’ benefits and responsibilities at the first place, because they have great influence on very important decisions.

The agreements should be kept private and confidential among the shareholders and board of directors. For small and new business this might really seem too early of a concern as there may just be a few persons running the company at this stage. But you will never what happens next. Back then; Steve Jobs had been kicked out of Apple for the same reason, because some shareholders were having disproportionately more power in the directors meeting. Shareholders agreements helps minimize internal disputes; to supplement companies’ standardized articles. I

t is a good start for every business. Here at Start Smarter you can download a free basic version of a Shareholders Agreement in our dedicated Resources section.


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