As 2022 begins, what are the New Year's resolutions that you should be contemplating for your business? Whether it be growth, retirement or exit planning, or simply getting those terms and conditions up to date, we have lawyers who can help and advise you every step of the way. 

Below are the top three important matters you should consider for your business.

1. Contract review

We know this gets mentioned time after time, but when was the last time you reviewed, or had a professional review, your business’ terms and conditions or contracts?

It may not be viewed as a job that will generate the most income for your business, but it could well serve to save you from losing a significant amount of your business’ income in the event your terms are unenforceable or a problem arises.

Simply because a problem has not arisen in the past is not a good reason not to have detailed legal contracts in place. In some respects, having good terms and conditions and contracts can be seen in a similar way to taking out an insurance policy. Just because your business has not suffered an insured loss in the last year does not mean you would cancel the insurance policy.

So what changes or issues do we see arising in 2022 in terms of contracts?

In respect of product safety and liability, there are a number of concerns relating to the safety of products bought online and challenges presented by emerging technologies and environmental issues. We expect this to be considered more throughout the year. 

In terms of consumer protection, changes to European Law means that traders who deal with consumers in the EU could suffer fines of up to 4% of their turnover for using contracts with unfair terms. 

The UK government is also considering introducing fines of up to 10% of annual turnover for those traders dealing with UK consumers on unfair terms. Electronic signatures will no doubt continue to become more popular and be used more widely. This will no doubt sit alongside growth in digital assets such as NFTs (non-fungible token).

2. Growth

There are many ways in which to grow your business during 2022. This may be by selling more of your product or providing your services to a greater number of customers. 

An alternative may be through entering into a joint venture with a competitor, supplier or distributor to open new markets and customer bases. Or it could be that acquiring a competitor, supplier or distributor enables you to find savings in economies of scale and growth.  

No matter how you look to grow your business our team can assist in advising on joint venture agreements and structures. Whether it is a purely contractual joint venture, or if a new special purpose vehicle is to be used, we advise on the benefits, pitfalls and how you can mitigate your risks and protect your assets. 

If you are looking to acquire a business we can assist in advising on funding, if required, advising on the structure of any purchase, due diligence, drafting purchase contracts, deferred consideration terms and matters relating to employees.

3. Exit

Of course, 2022 may signal the end of your journey as a business owner and the time when you look to exit.  

In terms of selling your business, we often find that the more preparation that is put into preparing your business for sale, the quicker and smoother the sale process. Ensuring that contracts, employee records, assets, property deeds, accounts, banking arrangements, terms of business, and licences are up to date and to hand is a great start in ensuring that you can demonstrate to a buyer that they are acquiring a well-run business. 

Identifying a buyer for your business is a big step. We are seeing a rise in the use of Employee Ownership Trusts as a mechanism for owners to exit a business, this also offers very favourable tax advantages. 

Management buy outs can also offer an easier exit strategy for sellers due to the buyers’ knowledge and involvement in the business, however, funding arrangements can be more problematic in these types of sales. No matter what your exit arrangements are we would be pleased to discuss your plans, or provide you with advice as to how we can assist and what options may be available to you.

We have the business lawyers on hand to guide and advise you and your business into 2022.