Commercial Legal Documents - Jacksons Law Firm

Whether you are looking to start-up a new venture or if your business is already set-up and established and you are looking to update your documentation, we are here to assist and advise you of the commercial legal documents your business requires and ensure they are bespoke to your business.

By answering the following questions about your business and how it operates, you will be able to access guidance on the types of documentation your business should have in place, the reasons why those commercial legal documents are needed and the implications of not having them.

Every business is different, from the way it operates to its legal structure and there is no one size fits all solution to the preparation of legal documentation. You will need to ensure that all of the documents that you use in the course of your business, as well as being fully compliant with current UK laws, are tailored to your business so that they accurately reflect what you do and how you do it. It is important to have advice from legal professionals in relation to this.

Our Corporate and Commercial Team’s contact details are set out at the end of the information questionnaire and we would recommend that you discuss your situation with them further.

The following document identification generator is to be used for information purposes only and you should seek legal guidance on your businesses’ individual requirements.

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Partnership Agreement

If your business operates as a Partnership, it is imperative that a Partnership Agreement is in place. A Partnership Agreement is a written agreement between the individual owners of the business.

The written agreement can deal with a range of matters such as how the business is to be managed, defining the rights and obligations of the partners to the business and to one another, the sharing of partnership profits or losses, the ownership of partnership property, the introduction, retirement and expulsion of partners, determining the rules of engagement should a disagreement arise between the partners and dissolving the partnership.

A written agreement can act as a safeguard and can protect both the business venture and each partner’s investment, it can reduce fractious disagreements later by helping resolve disputes if and when they arise.

It is particularly important to have a written agreement in place as the Partnership Act 1890 imposes default provisions if there isn’t one. More often than not, the default provisions set out in the 1890 Act are not what the Partners envisaged nor wanted for the business or themselves and they do little to assist in the resolution of differences between partners or protect the partnership business should any such differences arise.

Articles of Association

All limited companies registered in the UK must have articles of association. The articles of association are the company’s constitutional document and essentially, its rulebook.

They dictate various aspects of the day to day operation of a company, such as the appointment and removal of directors, the quorum for meetings of directors, director’s voting powers, conflicts of interests, the allotment and transfer of shares, the declaration of dividends the conduct of shareholder meetings and many other aspects.

A company’s articles of association are adopted during the incorporation process, however, these can be updated and new articles can be adopted post-incorporation at any point (provided a special resolution of the members (75% of the shareholders) vote in favour of this).

There are standard default Articles, known as the Model Articles, which can be used, or you can create a tailor-made version to suit the needs of your company. If you chose to adopt the Model Articles, you should carefully review these to ensure they reflect how you want the business to be administered. By their very nature they are very generic and accordingly do not take into account the specific commercial concerns of the individual business.

The Model Articles can be tailored to a particular business’ needs which you may find beneficial for your business operation.

Shareholders Agreement

A Shareholders Agreement is a written agreement between the owners of the Company.

Whereas the company’s Articles deal with the mechanics of how the company is administered, a Shareholders Agreement deals with the relationship between the shareholders themselves and their rights and obligations as between one another.

Unlike a company’s Articles, a Shareholder Agreement is a private agreement between the parties and is not held on a public record at Companies House, it can therefore include provisions that the shareholders might consider to be private or commercially sensitive.

Each company’s Shareholder Agreement will be different. It might, typically include the following:

The right for each shareholder, or for specified shareholders, to also be a director of the company;
Whether the consent of shareholders is required before the company can take certain actions, such as disposing of or acquiring significant assets, changing the nature of its business, incurring significant debts, issuing new shares, or winding up the company;
Restrictions on the right of a shareholder to transfer his or her shares, for example a requirement that they are first offered to the other shareholders at a price assessed in accordance with a pre-determined formulae;
The circumstances in which a shareholder can be compelled to transfer his or her shares, such as in the event of the death, incapacity, bankruptcy of that shareholder or an employee shareholder ceasing to be employed by the company;
Drag along provisions (the ability of a majority of shareholders to compel a dissenting minority to sell their shares if the majority wish to sell the company) and tag along provisions (the right of a minority of shareholders to have their shares bought at an equivalent price if a majority of shareholders intend to sell their shares);
Dividend policies; and
Exit strategies.

A Shareholder Agreement provides greater protection to the shareholders of the company than the company’s Articles alone. Whenever there is more than one shareholder in a company, it is strongly recommended to have a written Shareholder Agreement in place. In the absence of such agreement, the company’s Articles alone will apply and they contain very little provision by way of regulation of the relationship between the shareholders themselves.

It is never too late to put a Shareholder Agreement in place and, once in place, it should be kept under review as, by agreement, it can be amended and updated as circumstances change.

General Website Terms of Use

General Website Terms of Use govern the use of a website by its visitors. These are distinct from terms and conditions of sale and supply which are concerned with the e-commerce aspects of selling goods or services online.
The Electronic Commerce Regulations require all businesses with an online presence to include certain prescribed information (such as the company name and address, company contact details (such as email address), VAT number and whether the services are subject to an authorisation scheme) on their site. Website Terms of Use are the best place to include the required information.

Ensuring that your users clearly understand the limitations that you impose in relation to their use of your website content, including text, images, videos and music, helps to secure and protect your intellectual property. Furthermore, it is important that website owners can prove that they have made every effort to discourage any undesirable activity by visitors to or users of their on-line platform.

Website’s functionalities differ greatly from one another and there is no one size fits all in respect of Website Terms of Use. It is important that your terms reflect the purpose and functionality of your website and set out how you want visitors to behave whilst on your site, how you expect the website to be used and the consequences of non-compliance.

Cookie Policy

Online Standard Terms and Conditions of Sale/Supply

It is important for your business to have standard terms and conditions for the sale and supply of its goods and/or services. This is to ensure that both parties have clarity and certainty in relation to the basis upon which they are transacting with one another which, in turn, will help to avoid any potentially costly and lengthy disputes further down the line.

Businesses use standard terms and conditions for speed, consistency, cost and allocation of risk. Standard terms and conditions provide a framework for transactions, consistency between transactions, they save time and money in bespoke negotiations, enhance a party’s bargaining position and provides the opportunity for a party to impose its terms on the other.

It is particularly important that any terms and conditions are compliant with UK law and reflect your business’s practices. Depending on whether your business supplies goods/services to businesses or consumers (or both) will be the deciding factor in the content of your terms and conditions. Consumers require special consideration as the seller’s ability to restrict or exclude liability is much more limited and there is a greater risk that terms may not comply with consumer laws such as the Consumer Rights Act 2015. Businesses are, generally, able to contract on terms which they freely negotiation between themselves but the terms of a contract are subject to the requirement of reasonableness under the Unfair Contract Terms Act 1977.

When selling goods or services to customers online, the contract between the parties is known as a distance contract under UK law. There are additional regulations which a business must comply with if they are operating at a distance.

The business and its contract(s) must comply with the E-Commerce Regulations, regardless of whether customers are individuals or businesses, and the Consumer Contracts Regulations and Consumer Rights Act if selling to a consumer.

A distinct factor of distance contracts is that customers have the right to cancel a purchase within 14 calendar days of receiving goods or the confirmation, which ever is the later, this is known as a ‘cooling off’ period.

To comply with UK law your terms and conditions should include, for example:

your business name, geographical address and contact details;

a description of the goods or services;

the price and how long the price and any special offer remains valid for, if applicable;

details of delivery costs and arrangements for delivery;

providing information regarding cancellation rights (including details of the ‘cooling off’ period, if applicable) and how the customer can exercise such rights and who pays for the costs of returning goods; and

any guarantees or after-sale service that is provided.

Furthermore, it is important to seek legal assistance in respect of selling goods online to review whether you are legally required to provide a ‘cooling off’ period to customers. Terms and conditions which are inappropriate to your business or which are not compliant with the legal requirements can cause just as many problems as not having any terms and conditions at all.

Standard Terms and Conditions of Sale/Supply

It is important to seek legal assistance with the preparation of your terms and conditions so as to ensure that the specifically reflect the nature of your business, the goods and/or services that it supplies and the manner in which those goods and services are supplied. Terms and conditions which are inappropriate to your business or which are not compliant with the legal requirements can cause just as many problems as not having any terms and conditions at all.

Privacy Policy

A Privacy Policy is a legal document that states how your business and/or website or online presence collects, handles and processes data obtained from or in respect of its customers and visitors.

EU and UK data protection laws require that you provide information to individuals about the process systems and arrangements that you have in place to handle, process and use their data and the usual way of providing such information is by having a Privacy Policy in place. If you collect, handle and process people’s personal data it is essential that you have a legally compliant Privacy Policy in place.

People care a lot about their privacy and having a Privacy Policy in place helps them feel secure in providing any personal information. The absence of a policy could result in a lack of trust from customers or users and may also be in breach of the legal requirements, meaning the business could face enforcement action from the Information Commissioner’s Office (ICO).