The UK enjoys a growing reputation as Europe’s home of tech start-ups, with increasing numbers of new companies and investment helping the sector to shine in recent years.
Investment in tech companies hit a record £10.1billion last year, according to government-backed data, with almost one in 10 Brits employed by the tech sector.
It is expected that artificial intelligence, robotics, and cybersecurity will be crucial pillars in the growth of the UK’s tech industry.
Recent examples of the thriving tech entrepreneur scene in the UK include the banking app Monzo and food delivery service Deliveroo, which has completely altered the face of takeaway dining in major cities across the world since its foundation in London in 2013.
Tech start-ups by their very nature often come with a great level of expertise on their chosen field, but the number of legal obstacles to getting a business launched can often prove to be a challenge.
Here we’ll examine how to navigate the legal minefield before getting your tech start-up off the ground.
Do you need a founders’ agreement?
If your platform or product required a joint effort to take from ideation to creation, then this legal documentation will protect everyone’s interests moving forwards.
This documentation should be put together as soon as possible after your business is incorporated and comes in two parts.
A founders’ pledge clarifies the relationship between founders and the company, as well as establishing the roles that individuals have made to develop your service or product.
Once you are able to draw a salary from your company, a founders’ service agreement is required. This will prove particularly important if you are looking to secure investment from a third party.
Is your intellectual property secured?
Have you created something unique that requires a patent so others cannot undercut you? Patenting can be a laborious process that requires stacks of paperwork to prove that your concept is truly unique.
Likewise, securing trademarks for your branding and company name is another job that involves lots of pencil pushing.
To ensure that you’re fully protected, enlisting the help of a specialist law firm, such as Withers, will give you added peace of mind to continue innovating, safe in the knowledge that you are fully protected.
Is your business structured correctly?
Ascertaining whether your business should be listed as a sole proprietorship, limited company, or different structure is a crucial step towards getting your idea off the ground.
Choosing the correct format will have a knock-on effect on the taxes that you pay, and it could help protect your personal finances should things not go to plan in the early days of your business launching.
Again, having the correct structures in place could be crucial to securing extra funding from investors if the framework allows them to come on board more easily.
Are your policies watertight?
Check your privacy policies on your website – are they specific enough to what you are offering customers?
As tempting as it is to pick a templated policy from the internet, make sure to dig deep into your wording to make sure that no loopholes exist that could heap pressure on you further down the line.
Do you have proper contracts drawn up?
If you are employing people to your company, it can be tempting in the early days of operating to go cash-in-hand or work on a basis of mutual understanding, especially if those doing the work are previously known to you.
This is a mistake, however, and could land you in hot water legally further down the line if disputes are raised over payment for services, or getting those services completed to the necessary standard.
Getting everything down in black and white from the get-go protects both yourself and those working for you and sets you up to handle bigger contracts when they, hopefully, arrive in the future.
If you’re getting your next big idea off the ground, hopefully this can help your business find its wings.
Author | Emily Forbes
An Entrepreneur, Mother & A passionate tech writer in the technology industry!