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Guest blog: The legalities of starting and running a creative business

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For a change this week we bring you a guest blog by a lawyer. No, don’t click out again! It’s important stuff! There are loads of legal pitfalls out there for small creative business owners so here’s an overview from Dominic Higgins at Contact Law.

Building a business is one of the most exciting ways to make a living, and if you can combine this with your creative passion so much the better. The legal side of your business can seem tedious. But spending time on this will help you to avoid disputes and to use the law to your advantage.

Here is an outline of some key legal issues affecting creative businesses:

Business Structure
All businesses have a legal structure. There are two broad categories: Operating as a sole trader or partnership; and setting up a company or limited liability partnership (LLP).

A company or LLP separates your personal liability from the debts of the business and gives you more tax flexibility. However, it means dealing with a lot more paperwork. The business structure affects many other things including how you can obtain funding; control of the business; room for expansion; and your exit from the business.

It is important to consider all the implications of different structures, rather than opting for one that offers immediate advantages.

The Internet
Almost every business needs an internet presence to succeed, especially in the creative sector where you can use online media to showcase your artistry and innovation.

If you use an external consultant to set up your website, get a written agreement stating the functional and performance standards for the website as well as specifications for visible content. It should also say who has responsibility for making sure the website complies with the law, and who owns the intellectual property in the website.

When promoting, advertising or selling online, you need to understand your obligations under the Consumer Protection (Distance Selling) Regulations 2000 and the Electronic Commercial Regulations 2003.

If your website collects personal details you are have responsibilities under the Data Protection Act to make sure individuals understand and consent to how their data is used (eg. via a website privacy policy); to keep the data secure; and not use it inappropriately.

Intellectual Property
A catchy and exciting name; original written, musical or graphic works; an eye catching product design. These are all examples of intellectual property – the most important asset of many creative businesses. Protecting your intellectual property is crucial as your business could be ruined if someone steals your ideas.

Trademarks and designs can be registered at the UK Intellectual Property office, enabling you to prevent other businesses using them without your permission. Trademarks apply to branding (eg. your name, slogans and logo), one of the key things that makes your business stand out and stick in people’s minds. Designs relate to the visual appearance of consumer products like clothes, furniture or jewellery.

Creative work like songs, photos, art, graphics, and writing are protected by copyright. You do not need to register copyright as it is assigned to you automatically. However, you may want to keep evidence of when you came up with the idea (eg. by asking a solicitor to keep a record) in case you need to take legal action to protect your copyright.

If you are starting out in the creative industry it is likely that money is tight. But getting professional legal advice can be an excellent investment. Ideally, consult commercial solicitors in Nottingham or the surrounding area with experience in the creative sector.

Contact Law are a free legal service who can help you if you are looking to start a business in Nottingham, or need advice on running a business.