The term “creative business” is applied to industries including design, architecture, film and video, photography, the arts, publishing, advertising, performing arts, software and computers.
There has been substantial growth in the number of creative businesses in the UK in the last 10 years. Despite or even perhaps because of the current economic downturn people remain enthusiastic about starting their own business to exploit a creative expression. The process will present many challenges.
Without doubt, conducting a business with the benefit of limited liability is advisable.
Limited liability means that it is the company/limited liability partnership (LLP) which enters into contracts with third parties. The individuals stand behind the company/LLP and so are not personally liable for contracts entered to by it. This means that in most cases the business owner will have no further liability and so his personal assets will be safe. Personal guarantees are likely to be required, but the good thing is that the extent of such personal liability can be negotiated.
The business terms and conditions of trading may be part of a web site or a hard copy document. To be enforceable, the important thing is to ensure that they are incorporated into a binding contract between the business and the client/customer.
These can also be used as a tool for risk management by including terms which limit liability of the business if claims are made against it. However, for such terms to be valid and enforceable, careful consideration must be given to many factors including whether you are doing business with consumers or businesses and the particular nature of your products and services.
A big problem for many people is being ripped off. Products, names and ideas can, if not protected, be picked up by other organisations which are in a better position financially to exploit them. This can mean that the creator is left with no acknowledgment or monetary reward for their hard work and creativity.
Seeking advice and investing time in identifying the extent of IP, and properly protecting it, will help sustain and add value to the business, reducing the risk of being ripped off or being sued for inadvertently ripping others off.
It is likely that most businesses will need to be registered with the Information Commissioner’s Office because they will be collecting personal information such as names and contact details of clients, customers, staff or others. The annual registration fee is £30.
It is most common for businesses to incorporate into their terms and conditions a privacy statement which explains why personal data is being collected, and the purposes for which it will be used in the future, so that Data Protection and related legislation is complied with.
Creative businesses now have access to many relevant services and information designed to assist in growing successful and sustainable businesses. Funding and support organisations are accessible via the internet. Even traditional service industries such as law are responding with flexible and practical advice at reasonable rates.
Deane is a solicitor at Russell Jones & Walker