Over a year ago, when I first launched Citrus there were a long list of things that I needed to organize to get myself and the business started. I honestly didn’t have the vision that I have now. Really, all I was looking to do was to bring in enough revenue and margin to keep myself funded, enabling me the flexibility of running my own business and ability to construct my work around my recovery, rather than the other way around. For me this has been the best way.
‘Put my recovery first and everything else will be first class’ is what I have heard before, so that is what I wanted to do.
In the first few months of setting up shop, getting through a long list of legal documentation was not my number one priority. However, since things developed quite quickly there was a sizeable need for me to get to grips with my company’s legal requirements sooner rather than later.
Fortunately for me, an experienced lawyer specialising in tech and media was within arm’s reach!
One of the great things about being part of a coworking communities such as Platf9rm is that you get to be surrounded by like-minded small businesses that specialise in helping other small businesses.
Last year, I had the pleasure of meeting Samantha Oakley of SO Law. She launched her business off the back of a 15-year career as both a Freelance Consultant and in-house Lawyer and has worked for companies such as Channel 4, Comic Relief & Symbian/Nokia.
Samantha has helped many small businesses, social enterprises and charity organisations make sense of the legal processes involved and grow their businesses based on strong foundations. SO Law was founded forsmaller businesses that might not have a place to go.
“From my experience, smaller start-up businesses, don’t know where to turn to get the help they need on a limited budget. Often, they will scour the internet for previous examples of legal documentation required to get started. This may result in wasted time building a framework based on content that might not necessarily apply to their business model and leaves them unprotected. I knew I could step into this gap and help small businesses to help themselves.”
As a start-up Limited Company, here are the areas we needed to focus on to buildour legal framework.
1. Memorandum of Agreement and Articles of Association
Known as ‘Mems and Arts’ by Samantha and others in the legal world, these formal documents operate in accordance with one another to determine how your business will be run.
The Memorandum of Agreement (MOA) defines company objectives, powers and restraints, whereas the Articles of Association (AOA) is a set of rules and regulations to govern the company’s working. This includesstating what actions and procedures will be carried out internally; including the need to have regular board member meetings where ‘resolutions’ are passed.
This was the stage where Citrus Ornge’s social mission took shape and was woven into the very fabric of how we operate as a company. Through our work, partnerships and training programs, we strive to create greater employment opportunities for ex-offenders and addiction recovery communities, with a long-term goal of having 50% of our employees from such communities.
Citrus can also proudly say that 80% of the businesses surplus is being put back into our social mission.
In asking Samantha about how these two documents are written for other small businesses, she explained that these are probably the most crucial of documents to get correct the first time because of the greater implications they will have further on down the line.
For example, if any alterations need to be made to these documents a shareholders’ resolution would need to be agreed and passed. If any major changes need to be made that don’t fall within these parameters, it could require you to dissolve the company and start the entire process again! It is therefore paramount to thoroughly read and understand every detail of these documents before progressing further, including the Model Articles you can adopt when you register your company at Companies House.
2. Shareholders Agreement
As the title suggests, this agreement is set up between the shareholders. Unlike the other constitutional legal documents that are usually accessible by the public, this agreement remains confidential between the company and the shareholder. It is highly recommended that if you have two or more shareholders you have one in place to avoid any potential disputes in the future.
Although each shareholder agreement can vary enormously, it covers issues such as the relationship between the shareholders, the level of control over the company that is required and the commercial field. There are certain basic characteristics that outline what the document is put in place to regulate:
- Ownership and voting rights of the shares in the company
- Control and management of the company
- Making provision for the resolution of any future disputes between shareholders
- Protecting the competitive interests of the company
3. Remit of Intellectual Property
Intellectual Property (IP) can take many forms within media companies. From designs and branding to bespoke lead generation strategies, it is paramount that your point of leverage for creating and maintaining an edge over your competition is under lock and key.
Protecting your IP makes it easier to take legal action against anyone who tries to steal or copy it. It is advised that you have an NDA (Non-Disclosure Agreement) before discussing an idea with another party – more about NDAs in our next blog post.
As stated on the IPO website below shows there are various types of IP protection that are available for both companies and Sole Traders.
One key thing to note is that it is usually the company and not the individual directors or employees that own the IP. For example, say one company director wishes to exit out of acompany, although they were the individual who came up with the company name and concept of the logo design, they are now unable to go elsewhere and use them in any new ventures because the IP is automatically owned by the current company.
Direct Gov has a comprehensive step by step flow chart of what you would need in order to set up a Limited Company, which proves as an informative guideline: https://www.gov.uk/set-up-limited-company and business owners need to be aware of their legal obligations under company law (particularly the Companies Act 2006.
“The first words that were taught to me when studying were ‘Ignorance is no defence to the law’, which immediately hit home as to just how powerful and vital knowledge.”
Our next blog post will continue this going to cover the main areas of Privacy, GDPR and Legal Dispute Policies to consider when setting up a media business, so watch this space!
Citrus Ornge’s core offering is the generation of new leads and sales for B2B and B2C marketers using digital media and advertising tactics. The business also can provide the full suite of digital services for clients including all paid media opportunities, website builds plus social media management and execution. We generate leads, drive revenue and help you acquire new customers online on a cost per lead, registration, sale, view or download so pure performance marketing.