Intellectual Property (IP) Essentials for Small Businesses

We speak to business owners daily about their professional business service needs and one thing that often gets lost in the mix is their IP protection. Many consider it an issue for larger companies, designers, or inventors however, as experienced IP experts we know it can be one of the most valuable assets of any sized business. We also unfortunately know, how much of a headache it can be in cases of coping or unintentional infringement. In this article we’ll get you IP savvy in less than 5 minutes so you can make informed decisions about how best to protect your business.

1. What intellectual property does my small business have? 

Intellectual Property (IP) refers to many different creative outputs your business may have or use commercially. In includes but isn’t limited to imagery, logos, processes, symbols, designs, ideas, writing, names, website layouts etc. Every size and type of business will have some sort of IP which is valuable, how it is and what can be protected needs to be investigated.

2. What IP do I get automatic cover for and what do I need to apply for? 

To understand the value of your IP assets, we’ll look at what is covered automatically by UK law and what type of protection you’ll need to apply for:
Automatic protections – 
Copyright – This is automatically covered in UK law when the new piece of writing, photography, music, recording etc. is created. This doesn’t mean you won’t have to go to court if someone uses or copies your copyright.
Employee output – The creative output of your employees is also property of the company they work for if the work was created in company time or using company equipment. This should be stipulated in their employment contract however automatic protections in law come into play here. Please note this IP does still need to have protection applied for to stop others, outside the organisation, copying or using it.
Third-party designed logos – Do not assume this is a given, externally designed logos are not automatically your property. But all you have to do is be really clear when you engage a designer that you want it stated in the contract that the IP rights are signed over to you as part of the job.
Business Name Protection – ‘Passing off’ is a common law action that can be used to protect unregistered trade mark rights in the UK. For example, if you believe another business is copying your business’ name and customers may confuse the two businesses, you can legally ask the company to cease and desist. You will be responsible for the legal fees should the case go to court, and it could take some time to resolve. Alternatively, you can register your business name with Start.Biz for £99 (+VAT) per annum. As part of their Business Name Registration package from Start.Biz who will cover up to £10,000 of legal fees and deal with the administration of the case for you if a ‘Passing Off’ incident arises. Find out more here Business Name Registration.
Protections you will need to apply for – 
Trade marks (TM) – you can trade mark a name, word, logo, monogram, shape, letters, numerals, signature, or any combination of these.
Digital – this includes domain names and social platform handles. It is good to have your handle as close to the trading name as possible so people can find you easily online and know it’s you. Even if you aren’t planning or building a website just yet or putting content out on all social media platforms it’s wise to buy the domain name and set up the accounts on all major platforms. When you start to grow and want to develop your sales channels and marketing they’ll be ready waiting for you and not taken by someone else. Individuals and companies can buy/reserve domains and social media handles which they may offer to sell to you at a much higher price.
Registered design – A Registered Design protects the appearance, physical shape, configuration and the decoration of products whereas trade mark registration protects the names of your products or brands.
Patents – these are usually applied for by inventors or larger companies in the manufacturing or pharmaceutical industries. If you think your business may need a patent it is advised you seek professional advice from an expert.

3. How much is IP protection going to cost me? 

The costs of IP protection can vary dramatically so it’s good to shop around and understand all of your options:
DIY applications –
It is possible to apply directly to the Intellectual Property Office (IPO) yourself in the UK. There are helpful guides on YouTube and their website, and if you have the time to work it out, this could be the cheapest way of seeking IP protection. However, it isn’t without its drawbacks. Your application may be challenged, contain mistakes, or be submitted incorrectly with little recourse. All of these will come with extra costs meaning it may not actually be as cost effective as you first thought.
Engage an IP lawyer –
Their expertise and familiarity with the process will offer peace of mind however lawyers charges start from around £200-250 per hour so this is out of budget for many small businesses.
IP experts –
There are companies that specialise in IP protection, that have qualified experts and will charge a lot less than a solicitor. They will also have packages aimed at smaller ventures including Business Name Registration which will help you if your business is a victim of ‘Passing Off’. Start.Biz offer a free, no obligation IP consultation where we advise what IP your business has and how best to protect it, get in touch today to find out more 0121 678 9000 or email info@start.biz

Sole Trader vs Limited Company

What are the pros and cons of setting up as a Sole Trader vs a Limited Company? 

We’ve gone through the basic considerations for both and directly compared them so you can get a clearer picture on which is best for you. Areas to consider when setting up your business include:
Financial Liability
Status & Professionalism
Finance Options
Publishing Personal Details
Business Name Protection
Tax Requirements
Administration Requirements
Employment
Insurance
Sole Trader 
Limited Company 
Financial Liability 
If your business runs up any debt you are legally required to cover it, this may mean even selling personal assets.
Financial Liability 
By setting up a limited company your business becomes a separate legal entity. Therefore if the business does run up debts the business, rather than you personally, are responsible.
Status 
You can build a great reputation as a sole trader and many customers won’t know the legal ‘status’ of your business or, to be honest, care! They are there for your amazing products and service after all.
Status 
Having said that, some suppliers & clients may feel more secure dealing with a company that has gone through the formation process. Once you get larger and becoming more prominent it may be time to form a limited company.
Finance Options 
Along with being financially liable for the business, raising funds may be more difficult. Options as a sole trader include; savings, friends & family lending, go fund me pages, and some banks will loan you money however you may be considered too ‘high risk’ and refused. But if your over-heads are low and your cash flow good this may not be a concern for you.
Finance Options 
You will have more financial options open to you and be more likely to be approved for a loan from a bank or lending organisation. All the options of a sole trader will be available to you along with more official routes. If you need a premises to operate from, need to buy equipment or require some start-up cash to get you going forming a limited company will make it easier when applying for finance.
Personal Details 
Increased privacy. Your personal details won’t be published on Companies House.
Personal Details 
You will have to publish your name (as a director), the names of fellow directors and your business address on Companies House. You can limit the amount of information out there by registering with a secretarial business service eg business address but some details have to be made public.
The Name of Your Business 
Business name protection. As a sole trader you may be worried about others operating with a similar name to take advantage of your good reputation, advertising efforts and word of mouth promotion from customers. You can take out Business Name Protection here with NBR to stop this from happening.
The Name of Your Business 
No one can use the exact same business name as you, they legally won’t be able to form the company. However this doesn’t cover you in every situation, they could add an ‘s’ to the name or ‘solutions’ etc so their name ends up being very similar to yours. You can take out business name protection to stop this, find out more here.
Tax 
Tax can be substantially higher for sole traders, especially when you’ve established the business and are pulling in a good amount of money. Sole traders can be charged between 20%-45% tax on their profits (minus allowable business expenses).
Tax 
Tax for limited companies is lower and they are generally considered more ‘tax efficient’. They are required to pay only 19% on their total profits (minus allowable business expenses).
Administration Requirements 
There is less paperwork to do as a sole trader. You will still want to have an accountant but in terms of legally required documentation there’s less than a limited business.
Administration Requirements 
More paperwork to do with legal annual documentation having to be submitted. As with being a sole trader getting an accountant is a great idea, they will be able to help you with all the paperwork and requirements.
Employment 
You can employee people as a sole trader. Make sure you have insurance and are set up correctly with a PAYE scheme and pensions with HRMC. This is were an accountant will come in handy.
Employment 
As with a sole trader you need to set up a PAYE scheme with HRMC for any employees you have and take out the right insurance to cover them.
Insurance 
As a sole trader you are less likely to have to need different kinds of insurance but check out our ‘Sole Trader’ article where we outline the basic forms of insurance to consider.
Insurance 
As a limited company you may want to take out insurance. We have covered the basic forms of insurance in our ‘Limited Company’ article. One to particularly consider, as a limited company, is individual director insurance.
We hope our battle of the businesses has helped you make the decision which is best for you. Remember the hardest part is taking the first step, get out there, even if everything isn’t perfect and try!
Start.Biz have packages to suit any size and type of business. Get in touch here with our friendly, expert team today to discuss your personal circumstances and set up a solid infrastructure for your business.

What Should I get Legal Advice on as a Small Business Owner?

We’ve consulted our legal experts and complied the 5 areas of what the essentials are for business owners when it comes to legal compliance and safeguarding.  

There are other areas you may look into depending on your particular industry but this covers the fundamentals.

1. Intellectual Property (IP) protection 

Protecting your businesses intellectual property can come in many different forms and should be done as early as possible when setting up your venture. It’s also essential you check you’re not infringing on anyone else’s IP accidentally. Types of IP protection include:
Business name protection – when another business copies your name or has a similar name and / or branding to you, even if your company isn’t limited, this falls under common law and is called ‘Passing Off’. You can take action against the other business if you have prove they have caused you financial lose.
Limited Formations – by forming a limited company no one can form a limited company with the exact same name as you after you have registered. However they can register a company with a very similar name, still causing confusion with customers and therefore you can take out business name protection for your limited company to assist you in this case.
Trade marks – can be words, names, initials, logos, monograms, shapes or signatures, numerals and designs customers associate with your business.
Watching services – these are conducted once you have taken out a trade mark and contest any new trade mark applications that may infringe on your registered mark. Without a watching service your trade mark may become compromised and end up invalid.
Registered design – protects the appearance, physical shape, configuration and the decoration of products whereas trade mark registration protects the names of your products or brands.
National Business Register, as part of Start.biz, offers services that cover all of the above. We have more than 35 years experience protecting businesses and brands. Click on each service to apply or contact us today for advice.

2. HR 

Setting clear guidelines and rules between yourself and any employees from the out set will help keep you both on the same page. Please note the below is based on an employer/employee PAYE agreement, not when instructing freelancers, contracts, sub-contractors etc. We will cover those separately.
This process will not only manages expectations, on both sides, but can legally protect you in the future. You’re wording and ethos should be consistent throughout these documents alongside adhering to statutory employment law. You can find templates for most of these documents online, and some of them are free, we’ve liked to a few sites for you. Alternatively you can hire HR freelancers to help you set everything up or advise on a particular issue.
Job Description – this can be written for advertising the role you’re employing for but the internal one will be more detailed. When writing this to attract applicants you may keep it top line and add some extras about company ethos however the internal job description will go into a lot more depth about the role and not include things like the applicant must love dogs or make an amazing cup of tea!
Offer Letter – this should clearly state title of the role, company name, salary or pay, bonus scheme if applicable, basic holiday allowance, required start date and notice period. This should be sent as soon as the decision has been made to employee an individual.
Employment Contract – this should be drawn up and given to the employee whilst they are waiting to start with you or on their first day. It’s good practice to let them have a few days to read through it and discuss any questions. This is where you need to make sure you are compliant with the law so having a template and doing a little bit of research is good.
Disciplinaries / settlement agreements – these should be covered in the above but we wanted to mention them separately as they are important. Of course, you don’t want to think the worst and wouldn’t employ someone you thought you would have disagreements with but it happens. Having clear steps set up for bringing grievances and disciplinaries will make awkward situations easier to navigate. Also informing the employee and knowing the law when it comes to letting people go is essential.
Company handbook – this is where you can go into more detail about your policies and terms within the contract.
Template resources – 

3. Shareholder agreements comprising of Shareholders Agreements, Memorandum and Articles of Association 

This is clearly setting out what each partner can and can’t do. Again, like when employing someone, you wouldn’t go into business with someone that you envision having problems with but having clear guidelines make situations easier to navigate for everyone. There are many subjects that can be covered in these agreements, some examples are:
Perimeters of how you value shares.
Permissions on spends. For example, one shareholder can’t spend £15,000 of the businesses money without it being signed off with the other shareholders.
What happens when sell business, also what happens when one of you wants out.
On top of the headache of trying to negotiate when in a tense situation, if you don’t have a shareholders agreement it may cause problems when selling to someone else, they may even ask for one to be drawn up. If you go through formation agent, you’ll get standard memorandum and articles but a shareholders agreement is a bespoke piece that you can go more into detail.

4. Business Documents – Terms and Conditions (T&C’s), Privacy Policy, Partner Agreements 

All of the above have been focused on internal affairs of the business but now it’s time to think about your customers.
Terms and conditions – are obviously really important, especially if you are a sole trader providing service. We don’t recommend writing a get out of jail free clause for everything but be honest about the limitations of the service or product your providing. Keep it in plain language and reasonable; this will help with customer disagreements. A rule book of what you are providing so you and the customer are on the same page.
Privacy/cookie policy – it’s important if you store any customer information you have a privacy policy on your website. Standard templates are easy to download and need to be displayed where users can easily find them. They also need to include a clear way to contact you.
Partner agreements – if you want to set up networks, referrals, kick-backs, commercial arrangements you will need partner agreements. These are pretty straightforward and not everyone will ask for one however we advise drawing up a short agreement for both parties to sign so everyone is on the same page.

5. Buying and Selling Businesses 

If you’re not setting up your own business but rather buying one, you will have to cover the above but what about the legal element of the buying / selling process? Best practice includes:
Offer Letter – this is the ‘heads of terms’, it should include the top line details of the transaction and shows your serious intent to buy the business.
Due Diligence – this is when you get into the business to find the skeletons! Share holder agreements, current employment contracts, T&C’s, the money structure of the business will all be gone through.
SPA (Sale and Purchase Agreement) – this is the most detailed, legally binding document that is agreeing to the transaction, once this is signed the sale in final.

Business Name Protection

Why Register Your Business Name? 

Registering a business name is an important step when setting up your business. Choosing the perfect name can be daunting, so we are here to help you through the process. Our service is ideal for sole traders, partnerships and limited companies looking to check and protect their trading name.
Benefits of registering your business name –
Ensure your business name is unique, does not copy an existing business or entity, and meets all statutory legal requirements.
Protect one of your most important assets, your business name, from the malpractice of passing-off, in which competitors copy or use your business name.
Make the most of social media by protecting your online reputation and handles.
A guarantee that we will initiate and cover your legal fees, up to £10,000, if action needs to be taken.
Receive information on any relevant updates in legislation.
Become part of our business community and connect with likeminded business owners.
Access to resources and advice that will enable you to save time and money.
Here at Start.Biz (formly known as the National Business Register) we are passionate about supporting businesses and helping you realise your dream of being your own boss.
Register Your Business Name Now

What are the Costs of Business Names Protection? 

Business Name Registration costs an annual membership fee of £99 (plus VAT) and includes initial name searches, a display certificate, protection against ‘Passing Off’, obtaining formal statutory permission if needed and expert advice from Start.Biz.
We understand that setting up your own business can seem over whelming at times, our expert team has nearly 40 years’ experience and are here to help you every step of the way. If you have any questions about our services, or just need a little advice at whatever stage of your business journey you are, please get in touch.

How we Protect Your Business Name 

We will protect your trading name against copying by another business, company or brand. This copying is called “passing off”; legal costs, court fees, solicitors and counsel fees are paid by us, for further information please refer to the T&C’s.

What is ‘Passing Off’? 

The law of passing off stands to protect a trader’s goodwill and business against copying, (Passing Off). In order for a passing off action to succeed, you will need to substantiate the following matters:
A misrepresentation made by another, with respect to the business name, in the course of that particular trade.
The misrepresentation is made to the principal customers or prospective customers.
The misrepresentation does cause damage to the principal business or goodwill of which the business name has developed.
Although these elements may be present in an incident that constitutes ‘Passing Off’ it is important that you make us aware as soon as possible so we can act quickly. This gives us the best chance of the claim being successful.

How to Make a ‘Passing Off’ Claim with Start.Biz (National Business Register) 

We appreciate each situation is unique and may require slightly different information depending on the nature of the claim. Our team will be here every step of the way to ensure you are fully informed and take the hassle out of the process so you can get on with the running of your business.
We will ask you to fill out a ‘Passing Off’ complaint form with as much information as possible, sent via email.
Now we get to work! If there is any missing information we require to proceed with your particular claim, a member of our team will be in touch to advise.
We will then issue a letter of notice to the alleged offending party stating that they are ‘Passing Off’ an established business name. This letter will also include useful information for them and next steps on how they should proceed going forward.
If, after this letter has been received, the other party are looking to contend the ‘Passing Off’ action, we will enter a dialogue with them and/or their solicitors. We will start to build a case demonstrating their infringement and work closely with them to resolve the issue at this stage.
Once the above options have been exhausted and it is evident that the ‘Passing Off’ action cannot be progressed without resorting to litigation, we will take your case to the external Legal Counsel.
Since 1984 we have successfully prevented thousands of organisations from copying a registered member’s business name. We can boast a highly professional qualified team who are specialists in their field. Our business exists to protect members’ trading names and for a small annual fee you have access to, and support from internal and external specialists who will endeavour to resolve your problem quickly and effectively.
For a free, no obligation Intellectual Property audit or to discuss your personal circumstances please call 0121 678 9000 or email info@start.biz

Business Name Protection FAQs

HOW DO THE NBR CHECK THAT MY NAME IS AVAILABLE? 

We carry out comprehensive searches against 2 million businesses, 2.3 million limited companies, 2.5 million UK trade marks, 7 million European trade marks and 4 million domain names – that is over 10 million UK trading names.
Search Your Business Name Now

CAN I REGISTER MY NAME WITHOUT BECOMING A LIMITED COMPANY? 

Yes, we register your business name whatever the status of your firm giving you protection and peace of mind.

WHAT DO I NEED TO DO TO REGISTER? 

Search your business name here and apply online here. Once registered, will send you a certificate of registration which, when displayed, meets all the requirements of the Section 1200-1206 Companies Act 2006.

WHAT HAPPENS IF MY NAME IS ALREADY IN USE? 

We can search altnerative names for you free of charge or you can suggest alternatives for us to check with no obligation.

ARE THERE ANY WORDS I CANNOT USE IN MY NAME? 

There are a number of restricted words, which need to be approved by the Business, Enterprise and Regulatory Reform (BERR). Restricted words or terms are usually phrases associated with already established official bodies, for example; government departments, health care organisations or other public services. Please note if the restricted word is being used appropriately for your business we will gain permission on your behalf for use of a ‘restricted’ word. If you have any queries please do contact us before applying.

HOW CAN I PROTECT MY BUSINESS NAME? 

Registration with National Business Register specifically provides protection against “Passing Off”, the common law term used to describe copying of a trading name by another business. Your annual subscription means you have peace of mind when it comes to safeguarding your business identity. We will instigate and pay for all necessary legal proceedings in protecting your business name using our solicitors and counsel where necessary.

HOW LONG DOES IT TAKE TO REGISTER MY NAME? 

Registration takes 2 business days from receipt of your application form and remittance.

HOW LONG DOES THE REGISTRATION LAST? 

A registration is renewable on an annual basis. A renewal notice will be sent to you before your registration expires or you can select to set up a direct debit when protecting your business name. Please note, 2 or 5 year protection plans that come with discounts.