Top 8 New Year Legal Resolutions
To get your company house in order, here are the top 8 New Year Legal Resolutions to think about:
- Have a shareholder agreement in place
You may have good intentions with your fellow shareholders when the company is set up at the start, however relationships can turn sour and there are many occasions when shareholders can disagree on how a company is run. Having a shareholder agreement sets out in advance how the company will be managed and the division of power between the shareholders. It can also deal many other things, such as how shares can be transferred, non-compete restrictions, protection mechanisms for minority shareholders, a dispute resolution mechanism and what happens on termination of the relationship. It is a private document between the shareholders.
- Consider whether your articles of association need updating
Are you still working from Table A or Model Articles? There are many benefits from having a set of tailor-made articles. For example, they will enable you to set an appropriate quorum for board meetings to prevent deadlock, ensure that shareholders do not transfer their shares to other people without the other shareholders having an option to buy them first, ensure that a departing employee-shareholder sells their shares so that their exit is complete.
- Make sure you are complying with the GDPR
Significant fines can be incurred under the General Data Protection Regulation (2016/679/EU) (GDPR). Non-compliance can incur fines of up to the greater of €20 million or 4% of the previous year’s global turnover. Other sanctions can also be imposed which can inhibit personal data processing. Adverse publicity may also arise from non-compliance.
- Ensure you have appropriate non-disclosure agreements in place
Business discussions leading up to a concluded agreement will inevitably create disclosure of confidential business information by both parties. Always ensure your business information is protected before the discussions begin. Without a proper agreement, English law will not fully protect your information or provide the remedies you may wish to seek. An NDA, or confidentiality agreement, provides a contractual undertaking to keep confidential information secret in exchange of being given access to it.
- Check that all your company books and filings are in order and up to date
Ensure you have filed the annual confirmation statement, even if the company is dormant. Failure to do this is an offence committed by both the company and its directors and officers. Ensure the PSC register (people with significant control and relevant legal entities) is up to date. Make sure you have proper share registers, records of board minutes and shareholder resolutions. Check you are not behind with filing the accounts.
- Remind yourself of your duties as a director
If you are a director, ensure you are aware of the duties associated with that role.
- Consider the impact of no-deal Brexit on your business
This will largely depend on the nature of your business. Consider whether there will be any impact on your contracts with customers and suppliers. Consider if there will be any issues for your employees, such as recruitment and visa issues. Would it be beneficial to establish any subsidiaries in the EU?
- Consider whether you are getting the best from your current legal advisors
Are you getting the best from your current legal advisors? Are they responsive? Do they discuss fees with you? Do you feel you get value and expertise for your money or are you paying for their plush offices? Have you considered having a change? Thomson Webb & Corfield is a long-standing full-service Cambridge firm representing individuals and business. Come and talk to us.