With the Christmas holidays approaching, for those who have the opportunity, it is a good time during the holiday season to step out of business and have look at your business. Take a step back, review how the business is working (review how you work in the business!), what are your goals/ambitions for 2025 and take a look at some common problems/issues we flag to our business clients on a regular basis which all too often are put on the backburner using the excuse that “I am too busy!”
There is always the business plan that you drafted many years ago! When did you last look at it and see what you planned? What has happened since? Does it need rewriting now the business has grown, developed or changed direction?
Outside of the business plan we have a few suggested areas you may wish to review, if relevant to you:
INCREASE IN EMPLOYERS NIC & MINIMUM WAGE
The recent budget announcement increasing the employer national insurance rate to 15% and lowering the threshold at which it is paid, from 6 April 2025, together with an increase in minimum wage, is for most a significant cost increase.
If you have not done so already, you should consider modelling the impact of the change in respect of the future cost to the business.
The impact of the NIC increase can be mitigated by salary sacrifice arrangements, more details can be HERE!
THE ECONOMIC CRIME & CORPORATE TRANSPARENCY BILL
Is your business ready for The Economic Crime & Corporate Transparency Bill, which took effect November 2023, and is being phased in over the next two years, one of the final steps, being companies of any size being required to file a profit and loss as part of their accounts, at Companies House.
How business interact with Companies House will change, and penalties for failures will be significant. If you are not aware of the act, the changes, take a look at our summary, which includes some preparation steps/actions.
Business Names Act
If you are like us at Harbour Key, you will conduct the majority of your correspondence by email. However, we pick up a number of clients who don’t have a proper email “signature” that replicates the legal requirements shown on their business letterhead, (the company’s name, company number and registered office). As it is common to remotely reach agreements with customers and suppliers without them ever seeing a letterhead, i.e. knowing that you are limited company, should the contract go “sour” you could, as the director agreeing the contract, find yourself personally liable. This is regardless of the fact that you are a shareholder and director with limited liability because the customer may successfully argue that they believed they were contracting with a sole trader.
Action
Tidy up your email signature, website etc. to display the legally required information.
Shareholders’ Agreement/Partnership Agreement
Forming a limited company with other shareholders (and in particular where the individuals are all equal shareholders) is often effected without thought as to the merits of having a shareholders’ agreement in place, mainly due to cost. Thereafter, as everyone is busy it continues to be forgotten. But what would happen if you cannot agree how to run the business or there is a dispute or a director/shareholder walks out? Without a properly constructed shareholders’ agreement (and particularly if there is deadlock), this can easily lead to the company failing or you being caught in a situation that you cannot get out of – a situation that is likely to be made worse if there are bank or other borrowings backed by personal guarantees. The same problems can occur with a partnership if there is no partnership agreement in place.
Again, Harbour Key have recently assisted a new client who had this issue with a shareholder/director who had left the business but there was no agreement in place to enable their shares to be bought either by existing shareholders or the company.
Action
Dig out the shareholders’/partnership agreement for a review and refresh. If you have no agreement, start planning one and book a meeting with a solicitor. Take advice in relation to Inheritance Tax as it is easy to fall into a trap and lose entitlement to 100% relief when drawing up shareholders’/partnership agreements.
Terms & Conditions
Have you reviewed your terms and conditions of business recently or are you still working from a set ‘borrowed’ from another business? It is highly likely that these terms and conditions will be out of date and unfit for purpose. If you have a customer dispute or a non-payer, badly drafted terms and conditions will seriously undermine your legal position and undoubtedly either lead to expensive litigation or an equally costly “walking away”.
Advice
Have a solicitor review your business terms and conditions.
Review of Business Protection & Your Will
Have you reviewed your business protections (shareholder protection & keyman) recently? If your business has grown do you have sufficient cover or do you have any cover in place? Is it an expense you have avoided? Have you considered what would happen to the business should anything happen to you, what about your family? Keyman protects the business. Shareholder protection protects the business and your family by providing the business with funds to buy your shares from your death estate so that your family receive some funds relatively quickly.
When was the last time you reviewed your Will? Do you even have one?
Advice
Spend some time googling some quotes for cover, arrange to speak with an IFA and solicitor.
Intellectual Property Audit
Brands and trademarks are at the heart of many businesses, and are amongst a company’s most valuable assets. IP generally (including registered patents, trademarks, design rights, software, etc.) is valuable and the ramifications of not protecting these assets can be serious – theft, loss of reputation, loss of income and reduction in company value. Identifying and recognising your IP and having the right type of protection is essential.
Action
Review your IP – is there anything you can readily protect, for example a trademark can be registered on line for a fee of £175.
Review your Bank/Overdraft/Loan
When was the last time you looked at your Bank and the support they provide? Are the borrowing facilities the best value or are there other options? Getting a loan/credit is still difficult, and for many the help and support the get from their current bank is nil, there are a number of new challenger banks on the market looking for business. Alternatively, why not consider helping your retirement fund with a loan from your pension fund to your company.
Action
Do some internet research re business banking and best lending deals.
We are sure there are a number of other matters that can be looked at in any business, but the above are common ones we come across and are quick easy fixes if you spend the time to pick them up.
Should you wish to discuss any of the above, please do not hesitate to contact us.
