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Legal Checklist – six things you must consider when going freelance

Freelancers need all the advice they can get and when it comes down to legislation not knowing your liabilities can be a painful and costly lesson. Our new legal blogger David Gordon is an expert in giving legal support and advice for freelance, contracting and small businesses.

Six things you need to know (but might be afraid to ask your lawyer)

As the calendar rolls over to a new year, it is traditional to turn your mind to setting goals for the next 12 months. Deciding to break out on your own and go freelance (whether by choice or circumstance) could be a targets you have set yourself this year. If so, you may feel that there is so much to think about before you start out – it can be off-putting. Here are some key points to bear in mind.

Read on for six key areas you need to consider…

Contracts

I am often asked “we didn’t have anything in writing – so is there a contract?”. Where there is an agreement for money to be paid and goods or services to be provided then there is very likely to be an enforceable contract whether its in writing or not. The advantage of writing is that the terms can be made clear up front and the parties can agree what is or isn’t implied into that contract. E-mail counts as writing. So where, for example, you are agreeing an engagement over the phone, the best thing to do is send an email confirming your understanding of what you think you have been asked to do and the price agreed for doing it.

Structure

Are you going to be a sole trader or a limited company? The industry you are in may dictate this for you. For example in IT, service companies can be the norm, whereas for others it may be more unusual. There is nothing to stop you starting as a sole trader, seeing how it goes and then, when you’re ready, incorporate. Baby steps are often easier to cope with.

Professional Bodies

Check whether your professional body memberships are up to date and permit to you to carry on your chosen profession or trade. It may be that you have to re-register in your own right where previously your employer took care of this for you.

Insurance

Even if you are working from home it is worth considering office and public liability insurance in case something happens when you are out on the road or someone comes to visit you. You’re home insurance won’t always cover you.

Data Protection

Are you going to keep any individual’s personal information on your systems e.g. customers or suppliers names and addresses or other details? If so then you will probably have to obtain a licence from the Information Commissioner. At £35 per year it is a nominal price to be paid. The consequences of not having one when you should have can be expensive. If you are unsure whether this applies to you can check the Information Commissioner’s Office website for details (Do I need to notify?).

Website

It may only be an e-brochure but it will still have to comply with minimum rules regarding accessibility for those with disabilities. Your pages should have text only versions so they can be read by text converters. You should also establish privacy policies to limit you liability so that users know where they stand.

In short your particular sector will dictate what compliance and legal issues are key for you. From my own experience, keeping things simple to start with can make life a lot easier. Just make sure before going public with your new found status that you have at the very least checked you have the necessary clearances and licences. That said don’t let compliance and legal issues be a barrier to taking that leap of faith and making a fresh start in ‘09.

Are you covered? Do you have questions for David? Leave your thoughts below…

By David Gordon – solicitor and legal advisor



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