What’s yours is yours and what’s mine is mine.

That sounds like a very simple statement but sometimes working out what’s yours and what’s mine is not as straightforward as it sounds.

You may think that this is going to be about divorce, but actually it’s a situation that applies more to business than (dis)pleasure!

That is because there are all kinds of obligations that can arise in business, often without you realising it, such as duties of confidentiality, fiduciary duties, liens and data protection.

Take, for example, a situation where you are the sole director and shareholder of a company.  You’ve run it for years on your own, and consider it to be yours, because not only do you own it, you’ve invested time and money into building it up into what it is. You may therefore assume that everything and anything within the company belongs to you.  Unfortunately, it’s not as simple as that. You owe a fiduciary duty to the company, which is a separate legal entity. If your company starts to experience financial difficulties, and you decide to start again, you can’t necessarily take everything with you, or at least not without paying for it.  Things like the logo, database and clients belong to the original company, and if you transfer them over without paying for them, and the old company then goes into liquidation, the liquidator could pursue you to return the assets to them or sue you for damages. What’s more, because it is a fiduciary duty that you personally owe to the company, it could lead to a personal liability.

Alternatively, it could be that you want something to be returned to you from a third party, such as files and papers that are being held by professional advisers like accountants, or you might be asking whoever has been designing your flash new logo or your fancy new website to release everything back to you because you’re not happy with the progress. Depending on the terms of business of the professional, you may find that they have a legal right to hold on to your data or IP under a lien and there will be little you can do about it without either doing a deal with the other side (which might involve paying money, even if you don’t think it’s due and owing) or going to court (which can take time and will cost money, even if you win).

Which are further examples of the benefits of taking legal advice before you make any big changes in your business.  Getting someone to check over the terms you’re about to sign up to before you sign them could save you a huge amount of money in the long run, as it will point out the effect of some of the small print.  Talking through your business plans with a professional could also save you time and money in the long run, as your strategy to change your business arrangements could have unintended consequences.

Kleyman & Co Solicitors.  The full service law firm.  We mean business!