Starting a new business always carries risk, and while mistakes can feel inevitable, many common pitfalls can be avoided through careful planning and seeking professional advice. By identifying these risks early, business owners can help protect their company and lay the groundwork for long term success. At Slater Heelis, our Corporate and Commercial solicitors have extensive experience guiding clients through these challenges to prevent costly issues and ensure smooth, successful outcomes.
This guide will explore the most prominent of these challenges and explain how timely legal advice can help you manage risk and protect your business from costly mistakes.
RISK 1 – Poor record-keeping
A well-run compliant business starts with clear administrative procedures. Relying on verbal promises or informal arrangements will leave your business vulnerable to misunderstandings and disputes, and will inevitably cause complications as the company grows.
Maintaining a concrete system of records and documentation from the start will stand you in good stead, ensuring you comply with company law, data protection legislation and good governance generally, demonstrating professionalism to investors and potential stakeholders. Key things to keep documented include:
- Register of members and directors: record ownership and management responsibilities within the company;
- Board meeting minutes: detailed notes of decisions and resolutions made by the board;
- Financial records: accurate accounts, regular management accounts, invoices, and receipts for compliance and transparency;
- Contracts and agreements: written records of agreements with customers, , employees, and suppliers;
- Records of all intellectual property rights developed or used by the business, together with the chain of ownership;
- A record of your data processing activities.
Risk 2 – Unclear/poorly defined business structure
Uncertainty around ownership and decision-making can very quickly evolve into tension between stakeholders, undermining the stability of a growing business. Once again, maintaining a clearly defined process for this is vital, as putting solid arrangements in place from the beginning helps manage expectations and reduces the risk of disputes later on. Our Corporate team regularly supports businesses in putting these frameworks in place to ensure they align with long-term commercial goals.
RIKS 3 – Failing to protect your intellectual property
Intellectual property (IP) refers to the legal rights that protect your business’s creations, innovations, and branding. It is often considered one of a company’s most valuable assets, yet it is frequently overlooked in the early stages. Without adequate protection, your IP may be exposed to misuse and disputes, so it’s important to consider the different forms it can take and how to protect it. IP covers:
- Trademarks for your brand, logo, or product names
- Patents for inventions or innovative processes
- Copyrights for creative work, software, drawings/designs or written content
- Design rights in products.
Our Commercial team can help you develop an IP strategy tailored to your business’s needs, helping you register your assets and clarify ownership to safeguard your ideas, strengthening your position with investors as your business grows.
Risk 4 – Not having shareholder agreements in place
As your business grows, founders may bring people (such as investors and key employees) into the company by offering them a stake in the business. One of the most frequently damaging mistakes is failing to draft a comprehensive shareholder agreement. When this is missed, disputes over equity, decision-making, and exit strategies can arise, jeopardising the stability of your business.
Our Corporate team can help prepare legally robust agreements, giving you confidence that everything from ownership percentages, voting rights, roles, responsibilities, and exit strategies, are covered from the outset.
Risk 5 – Failing to stay on top of ongoing legal obligations
Even once your business is established, there are ongoing responsibilities that require attention. Filing deadlines, statutory updates, and regulatory requirements may seem routine, but overlooking them can lead to some severe penalties.
Key obligations under UK law consider:
- Filing regular documents and updates with Companies House
- Maintaining statutory records and registers
- Meeting tax and employment requirements
- Renewing any licenses or regulatory permissions
- Keeping up with changes to relevant legislation
Our Corporate and Commercial solicitors work alongside our Employment team to put processes in place that handle these obligations efficiently and provide support when engaging with employees or trade unions, so you can focus on growing your business with confidence.
Get In Touch
Scott Sands is a Partner and Head of our Corporate team at Slater Heelis. The team advises businesses on a wide range of corporate matters, from shareholder agreements and equity structuring to intellectual property protection, exit strategies, and ongoing compliance.
Carla Murray is a Partner and Head of our Commercial team at Slater Heelis. The team advises businesses on a variety of commercial agreements, distribution models, manufacturing arrangements and technology agreements. The teams support businesses in licensing and protecting their intellectual property rights and protection and data protection policies and strategy.
If you’re starting a business or looking to put your company on solid legal footing, get in touch with our Corporate/Commercial team today. We can guide you through the legal considerations, draft tailored agreements, and provide practical, commercially focused advice to help your business grow securely.
Call us on 03300 297 347 or fill out our contact form to arrange a consultation.
