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Posts for October 2009
A striking problem
October 28, 2009
Are we set for a winter of discontent? News that airline workers are to vote for their traditional festive go-slow in December comes this week as early holiday greetings to us all. BA workers are not alone – bus drivers are currently staging their eighth strike in almost as many months. But what should you do if you’re faced with a legal dispute at work? As a small business, it is unlikely you will ever have to handle an all-out strike, but commercial disputes are all too common. For instance, cases of bad debts have increased by nearly ten per cent this year alone. If a rubber cheque or endlessly delayed payment has seriously damaged your business, you may well be tempted to sue – with vigour. The trouble is that going to court can be costly and time-consuming. Before you go down that road, make sure you:
- assess whether you have a clear, strong case
- try to negotiate an amicable resolution
- decide if you need to pay for legal advice
- accept a reasonable offer rather than going to court
- are prepared for a long, slow and pricy process if you pursue legal action.
Remember there’s no point wasting time and money chasing someone who cannot pay. Be prepared to compromise and whatever you do, don’t ignore the risks of losing any legal action you undertake. For more advice on how to handle disputes visit www.lawdonut.co.uk.
Minimum wage rates rising to £5.80 an hour
October 20, 2009
With adult minimum wage rates going to £5.80 an hour, we ought to be prepared to justify in business and social terms how it is that some people are being paid five, ten, twenty or a hundred times that amount. We have spent so much time on ‘equal pay’, and this has brought only mixed results. Perhaps we should now turn our attention to ‘unequal pay’. We need to be sure we are not simply funding a ‘people-like-us’ wage spiral that has no underlying financial or commercial objective for the organisation, or indeed the nation. Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy. Tel: 08452 303050 Fax: 08452 303060 Website: www.irenicon.co.uk. You can follow Annabel on twitter – http://twitter.com/AnnabelKaye
Divorce and the SME: could you lose your livelihood as well as your love life?
October 13, 2009
With most small businesses being family firms, it’s a surprise that divorce isn’t mentioned more often as something of a business risk. What would happen to you and the company if your marriage broke up? Following the recent trend of courts handing out huge payoffs to housewives and husbands alike, could you lose your livelihood as well as your love life? English courts used to leave family businesses out of the equation when totting up the assets of failed marriages – not any more. Now they try to keep the business in the family if it produces enough income to keep two households reasonably comfortable. But if it doesn't - or a warring husband or wife objects - the business will be included amongst the assets to be divided between them. The courts take the view that, where one partner in a marriage builds up a business, and the other maintains their home, the home-maker's support may be equivalent or “nearly equivalent” in value. Even where judges are not prepared to go that far, they are likely to value the home-maker's efforts much more highly than his (or, more likely, her) partner does. And in that case, even if the stay-at-home wife/husband had zero involvement with the “family firm”, he or she can still effectively force its sale. Circumstances that make selling the business more likely include:
- a long marriage - anything over 11 years counts. However, home-makers of less than five years' standing have been given big shares of the joint assets when other factors (see below) have been involved
- where the home-maker has sacrificed their career to support the business-builder
- where children, or other family responsibilities, have fallen on the home-maker
- where one or both of the parties has suffered severe illness, redundancy, bankruptcy or a crisis in which they relied heavily on their partner.
However, some marital events make a sale less likely:
- if the business produces little income now and has poor prospects, or if the income depends entirely on the skill and presence of the business-builder
- a short marriage
- a pre-nuptial agreement (they have no legal standing in England but the courts are likely to take them into account if they were properly handled).
If you are faced with a split, you can take precautions to get the settlement right and fair. Start by valuing the assets you brought into the marriage – professionally, if you think they are substantial. If you are an employer, that includes your business. If you are a one-man band and expect to stay that way, don't bother. What you gain on the roundabout you’ll lose on the swings. The longer the marriage goes on, the less useful the valuation will be - but it might be handy for a sudden break-up. While you are arranging this valuation, try to reach agreement on how the business will be valued thereafter, and reach an agreement on the business value with your spouse, which should at least remove one source of argument. Do not lie about how much the business is worth; your spouse, or even the Court, will see it as a duplicitous attempt to short-change, and take a hard line. Try to build up assets outside the business during the course of the marriage – you can sell them if needs be, rather than lose the business. Consider holding a substantial part of the business's assets in cash or other easy-to-reach ways; again, if necessary they can be released to fund the settlement. There are other, though less straightforward, alternatives; seek advice.
Intellectual Property 101
October 07, 2009
Most people know what intellectual property rights are, and nearly everyone knows that they can be fairly useful and important in a competitive business environment. But in my experience, most people have a poor understanding of some of the key categories of intellectual property and the protection that’s available for them. The following is by no means a comprehensive survey of IP protection. But it's a good start, in plain English, for anyone thinking about protection.
Copyright gives an author (or an artist) the ability to protect their work. So if someone creates an original text in the course of their business (for example, an instruction manual), copyright means that others can’t use or reproduce that text without permission. This protection is so strong that it’s not even necessary that the author has branded their work by stating "copyright", their full name and the year that the work was produced.
Trademarks protect you from having your business’s image or brand reproduced by another business. Trade marks can protect a name, word, phrase, logo, symbol, design, image, or combination of these - you can even trademark colours and, I think (but don't quote me), scents. You need to go through a formal registration process, and your trademark will be in relation to an industry and region, depending on the trademark you apply for. But if you don't apply for a trademark, you don't have one! Just putting TM beside your new product doesn't get you the protection you need.
A patent lets you protect something you've invented - such as a machine, a material or a process. Patents give exclusive rights to the patentee and have varying levels of financial obligation and term, depending on a number of things including which territories (parts of the world) and categories (eg “food” or “textile” you want protection for). It's relatively complicated to apply for a patent, but once you have one, you are well protected against anyone trying to steal your idea.
Then there’s design registration and design right which provides the creators of new designs with varying levels of protection. You can choose to register (with the Intellectual Property Office) or not, and protection ranges from three years to 25. Exactly what is protected differs depending on how far you go with registration. Protection can also be extended to other countries.
Intellectual property protection can become quite complicated and the laws in this area are developing all the time. So you really should always seek help from your lawyer or other intellectual property specialist.
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