Commercial Business Structures
Sole Trader - working by yourself, no employees, no forms, just pay taxes, individually takes all the risks and could end up personally bankrupt if things go wrong, £12 to become a sole trader
Limited Company - protected from personal risks
Partnership - two or more people coming together to make money, all equally responsible for risks, can all be sued or made bankrupt, only person you have to tell is the tax man
Limited Liability Partnership - cross between a limited company and a partnership, allows you to continue working as a partnership but gives you the protection of a limited company, have to fill in forms to apply
Limited Company
Members/shareholders are the founding members of a limited company, or anyone who invests in the business
Members/shareholders ask people to run the company for them, call directors - responsible for the day to day running
Directors ask a senior management team to run the business for them, called staff
In a small organisation, one person can do each role
Limited liability protects the members/shareholders - it means that members/shareholders can put money into the business and if it goes wrong they’ll lose their investment but not they’re personal assets (house, car etc)
Limited Liability Partnership
Structure a bit simpler that a Limited Company
Partners > Senior Managements Team > Employees
Long-term funding from places likes the Arts Council aren’t for commercial businesses, only for not-for-profit organisations
Faulty business structures = wasted time, energy and money, void transactions (got the technical details of a deal wrong and so it’s voided), personal liability, reputation, criminal offences
Finding the right structure
Consider the paperwork you’ll need, the taxes you’ll need to manage, how to take the profit of your business, your personal responsibility if your business makes losses
Government website called Companies House https://www.gov.uk/get-information-about-a-company
Allows you to view information available on any company registered in the UK
Having your home address as a registered address is the easiest but means lawyers can find you
Once the company is running you have to file a copy of your accounts every year (viewable online)
If you want to be a company you have to release certain personal details
If you want the protection you need transparency
Trading Names
Must declare your official name(s) (from birth certificate) on all documents
But can also operate under a trading name
All formal business communications (invoices, letters, emails, all paperwork) must include:
Formal name, company number, VAT number (if registered), correspondence address (must charge VAT on top of your selling prices if you’re making £80,000+ ish)
Names and Brands
Brands are protected under intellectual property under trademarks ™ (for free, a free trademark)
But for the best protection you must fill in a form = a registered trademark ® (£170 for ten years UK protection, can pay half up front) (£1,500 for the whole of Europe)
Trademarks operate under a class system
Books are paper goods protected under Class 16 - can register the Shy Bairns trademark for just books would only be £170
To fully protect a name or brand you must register a trademark in all classes that you’re operating in
To prove you had a trademark before anyone else, keep records of how long you’ve being using a name/brand
Unofficial people sometimes fish new trademark applications to try and bill and scam them for more money
Can search for trademarks: https://trademarks.ipo.gov.uk/ipo-tmtext?reset
Search for who owns domains names at: www.nominet.uk/
Patents
Protecting a new invention, costs tens of thousands of pounds
Don’t tell anyone about it until you’ve filled in the forms - if you tell everyone it’s not considered ‘new’
Confidentiality Agreements - if someone has signed a confidentiality agreements and then breaks it you can take action
Copyrights
Symbol is free to use in the UK and needs no registration, the more you use the symbol the more respected the protection will be
Protection of ‘works’ : original literary, dramatic musical or artistic works; sound recordings, films, broadcasts or cable programmes; arrangement of published editions
Websites and software come under literary works because of the written code
Images and text on website can come under artistic works
Publication rights ℗ - taking old work with expired copyright (like Shakespeare) and republish in a new way, the form in which content is published is the part that is copyrighted
Publishing new content would come under artistic works as well as published editions
Copyright is owned by the creator of a work, unless it’s created by an employee of a company (in which case the company owns the copyright) or you’ve signed a deal to sell your rights
Can prove its your work by posting it to yourself or posting an image online (preferably someone else’s), phones or emails isn’t necessarily safest because technology can break
If it’s an artistic or published work (including websites), copyright will last 70 years from the end of the year in which the owner died
Recorded music gets 70 years copyright from the date when it was published
Copyright restricts the copying of all or a substantial part of the work, issue copies to the public, perform/show/broadcast, adaptation
Creative Commons are a set of symbols you can put on your work to indicate that anyone can use it (public domain, carbon copy, not for commercial purposes)
Orphan Works - when you can’t find the owner of a work, write to the IPO and ask to use an orphan work
Moral Rights - the right to be credited for work
Paternity rights
Integrity rights - to prevent cropping and altering the integrity of the work
Ancillary rights
Performance rights - preventing work being performed in public
Database rights - preventing it from being added to a database
Resale rights - if your work is resold at an auction house or a gallery you will receive a royalty payment (payment and notification of sale if handled through DACS)