What you need to know about Contracts and Insurance

As a young entrepreneur, it is easy to get flummoxed about the “legal stuff” – so Vanessa Cullen, Director of Forward Thinking Design and winner of 2010 Anthill 30 under 30 winner; has put together a Contracts and Insurance 101 piece to help you get your head around it all….

Indemnity, Business Insurance, Contracts, IP and more

Service Contracts

• If you’re in a service industry get your service contract written by the best legal counsel you can afford.

Your professional association may be able to provide you with a basic pro-forma contract template but I’ve largely found these to be deficient when it comes to the reality of what people will try to get out of paying you for your services.

By all means, draft your own contract, using such pro-formas as a basis but do invest in submitting this to a solicitor who specialises in contractual law and has experience of your industry.

Their services certainly won’t be cheap but you’ll save so much more in the long run by having a good, solid, hole-proof contract upfront.

Who’s Signing the Contract?

• Ensure that the person signing (and named in) the contract is the same person responsible for paying you.

If anyone says they’ll be paying you on the behalf of the person who signed then get it in writing, with an acknowledgement that they’ve read the contract and understand that they’ll be held accountable for late payment.

Or, better still, reissue the contract in their name and have them sign. Ensure you’re contracting with an individual or company, not a trading name or false entity.

For large contracts you’d be well advised to conduct a background credit check on the client to ensure they have the capacity to pay versus a history of defaults.

Claiming Fees

• Aside from your fees, also include costs in your contract so you can be reimbursed for travel, printing etc. Make it very clear when payments fall due.

Ensure all parties can identify the end of a stage of delivery so there’s no later argument about when your services have been deemed to be completed, your involvement in the project is in order and the account should be settled.

Licensing Intellectual Property

• Include licensing arrangements in contract terms and conditions even if project is only proposed as a one-off.

You must limit the licence to use your IP or risk it being stolen and replicated.

An example of this for us is when we design one store but the client then decides to sell our design to franchisees to roll-out subsequent stores.

We have licencing arrangements with our clients that allow them the freedom to expand and franchise but which also ensure we receive a suitable return on the replication of our design.

Public Liability and Professional Indemnity Insurance
• You must get public liability insurance and professional indemnity insurance. You’d have to be crazy to run a business without protecting yourself from litigation.

Read the paperwork carefully and ensure you’re properly covered.

Business Insurance
• I also recommend you get business insurance to protect your business from costly interruption and to protect your assets.

Be careful to enquire about ‘add on’ covers.

These are items that you’d think would be covered in the general business insurance but which your insurer has decided (in their infinite wisdom) to make separate options.

We got stung one year by not realising that business items in a business vehicle were not insured because we didn’t realise it was a separate ‘option’.

When items were stolen from a vehicle, we found we had no cover. Business items on your person or in your vehicle may not be automatically covered. Read the PDS in great detail.

Purchase Records

• Record all conversations with insurers and suppliers at purchase time, they often do and you should too. This protects you from errors in their sales process that may be difficult to prove later on.

We hope this helped!

Changing Your Business Name – What to Keep In Mind

First up, do you need the change?

Unless you have a good reason to change your business name, don’t do it. After all, you’ve worked so hard to become well known by name and brand and now you could be undoing all that hard work! But, if the name of your business no longer reflects your products or services, then changing the name could be a great move! You could gain a new audience and image. For example, The Frank Team used to be known as Youth 2 Youth (Y2Y). It had grown to be a company that not only provides workshops for young people, but for grown ups too, and so the name (Youth 2 Youth) wasn’t a perfect fit anymore.

Has your business expanded to provide more services or products? Maybe its time you considered a change too!

Some Tips When Changing Your Business Name:

Spread the word

It’s important to inform all of your clients, colleagues and friends of changes. Apart from the process being more confusing for you if you don’t tell them, you might lose their business if they can’t contact you easily.

Also make the change a positive! You want people to know that you’re happy about it and that your service will be kept tip top during the transition!

Reassure your customers you’re available to speak with them if they have any questions. It’s also important to get the word out there so that new clients can see you do have a fab work history, and you don’t have to prove your experience all over again…

Launch it!

Think of a creative way to launch your new name! This is a great way to get people talking about you, while explaining the change over. And tell everyone why you have changed your name so they don’t get confused with what services and products you will continue to provide.

Y2Y sent out an email to our address book telling them we had a secret. Then we sent out a pack to everyone with a letter explaining we are now The FRANK Team, why we were changing, our new contact details, and some ‘frank’ treats, including a funny cheerleader group photo of our staff playing on the word ‘team’ in our new name – very nice! ; )

Check it out

Before changing your name, it’s a great idea to do some research into possible new names – are your name ideas already registered or very similar to existing names?

You can check if your new name idea is unique by doing a “company name search” for Australian businesses at ASIC.

All the legal stuff

If your business is a company, contact ASIC to register a name change and follow their steps to take when changing your business name.

You can reserve available names if you’re undecided – this will cost you $40 for each name put on hold – then the name you choose gets registered and linked to your existing ABN and ACN. Y2Y reserved a couple of names and now we’re registering our chosen name – The FRANK Team – which needs to be done within 14 days of changing over the trading name.

If your business is not a company (eg. sole trader or partnership) you need to contact the appropriate State or Territory authority that you registered your business name with. You can find out who you should contact on the Australian Government’s website -

You can also visit the ABR site to find out the business names that are available and already taken in your state or Australia-wide.

If your business is a not-for-profit or charitable organisation, visit this ASIC site to find out how to register your new name

Once you’ve registered your new name, if you want to keep it protected you should get a trademark. This will give you all proprietary rights to the name – meaning you own it and if someone tries to trade under a name very similar you can take action on it. To get info about trademarks, go to the IP Australia website

When you do change your business name, it’s a good idea to hold on to the old one for at least a while after the change – to make sure no one else grabs your name and causes confusion or pretends to be you! So you may want to renew your old business name even after you’re trading under a new name.

The same applies with a trademark – if you want to hold on to a trademark from an old product or service, you need to keep the trademark current and continue promoting it as a trademark. If you don’t use your trademark for a period of 3 years, it can be cancelled by the Trade Marks Register.

Changing your business name takes up a bit of time, but the most important thing is to be genuinely excited about the change, then ensure that those who need to know your change are notified in a creative way – this could be your biggest marketing exercise yet!