Getting Started with Contracts (The legal stuff)

**mudskipper** · 7 September 2011, 20:33

Originally posted by MrT View Post

Friendly Greetings All,

This is my very first post as i venture into exploring the wonderful world of contracting, so go easy on me, please

So a bit of background....at the moment i work as a permanent employee for a large outsourcing firm, recently the company i am contracted into asked me to do direct contracting to them (a different part of the business and a different role). After a few "Early" discussions we have agreed to progress forward and have set a day rate and some early T&C's for the job spec, all good i think!

I am just about to go down the path of setting up my own LTD company using either SJDAccountancy or Inniaccounts (not made my mind up yet, but any help/guidance would be MUCH appreciated). The only thing i think i am really lost on is how i go about actually drafting the legal-jargon-enwrapped document to put infront of my new client to sign so i can start.

I have searched the internet and found a few good sites that offer paid/free contract templates to direct clients, but i have no idea how reliable or accurate these are. Does anyone have any pointers to help me get a contract in place, are there companies that can help me do this? I am sure this is one of those "duh its obvious" things, but being totally new to this i am a little lost and hope you can help me find my way....

Many Thanks,

Mr.T

SJD supplied me with a template when I signed up with them, but I know someone else couldn't get one from them. Failing that, if you join the PGC you can download a template. The templates generally don't include things like rate / payment terms / notice etc. but refer to a schedule which you'll need to create yourself.

Good luck!

**northernladuk** · 7 September 2011, 20:37

If you joing the PCG they have some templates you can use I believe...

(Only put that to steal Mal's thunder!!)

This bit doesn't sit right with me though...

So a bit of background....at the moment i work as a permanent employee for a large outsourcing firm, recently the company i am contracted into asked me to do direct contracting to them (a different part of the business and a different role).

So you are going leave your current employer and go work as a contractor in to their client? Have you told your current employer about this and have you checked your contract. Last time I worked for a large outsourcing company they had a pretty tight handcuff clause when it came to clients poaching us and were not very understanding the few times it happened.

You need to check very carefully. If you employer busts your or the clients balls over this you could be out of two jobs (ok a job and a contract). Of course your current employer won't jeapordise his relationship with the client but if it is big enough a couple of managers having an argument won't be an issue.

**Wanderer** · 7 September 2011, 20:41

Another vote for the PCG's templates - if anyone knows how to do them it's these guys. They will also sort you out with the insurance which you will most likely need, an accountancy/company formation package and lots of other advice too.

You will most likely need to get professional advice on IR35 as it's dangerous to go from a permie job to a contract job for the same client unless you have a cast iron contract, you are genuinely in business AND there is a mutual understanding of working practices etc between your company and the client.

Not saying it can't be done outside IR35, just that you need to get some proper advice about it because it's high risk.

Good luck!

**MrT** · 7 September 2011, 20:44

Thanks so much for the help everyone - I wasnt expecting so much support so quickly!

I will go have a roam around PCG's site, does anyone recommend a package as they seem to have lots that cater to many scenarios...

Cheers!

Mr.T

**malvolio** · 8 September 2011, 08:15

Originally posted by MrT View Post

Thanks so much for the help everyone - I wasnt expecting so much support so quickly!

I will go have a roam around PCG's site, does anyone recommend a package as they seem to have lots that cater to many scenarios...

Cheers!

Mr.T

Good to see the propaganda fiinally taking effect guys...

Anyway, you need either standard (bascially IR35 investigation cover plus extras) or, better still, Plus ( any tax investiogation cover, jury service cover, agency default cover and various other things).membership.

But if you want the whole get up and go package, go for One Stop - membership, accountant, bank account , stationery and various other bits and pieces all wrapped up and ready to go.

Even if you don't do the sensible thing and join, download and study the Guide to Freelancing, ansd see how much you don't know you don't know.

**SueEllen** · 8 September 2011, 08:37

Originally posted by northernladuk View Post

This bit doesn't sit right with me though...

So you are going leave your current employer and go work as a contractor in to their client? Have you told your current employer about this and have you checked your contract. Last time I worked for a large outsourcing company they had a pretty tight handcuff clause when it came to clients poaching us and were not very understanding the few times it happened.

You need to check very carefully.

Agreed he needs to get that legally checked over but I know off about a dozen companies who attempted to put such handcuff clauses in their permies employment contracts, but due to the wording many a lawyer has pointed out they would have difficulty enforcing the clause.

One reason why some companies have 3 months notice clauses to get around this, so they can put you on garden leave immediately you resign.

**MrT** · 8 September 2011, 09:50

Hey Everyone...again!

Loads of good stuff coming back, thanokyou all so much!! So just a quick response to some of the questions around my current employment and contract you have asked about.

There is a clause in my employment contract (supposedly) but I have asked for a copy from hr as I signed it about 5 years ago and think its in a box at home...somewhere!

However a colleague of mine has just done the exact same thing I am talking about and apparently the cost/hassle of actually going after employees far outweighs the salary they pay us so unless your a VP they don't typically bother unless your on silly money or important to the company (...not that I'm not,right?!).

He also mentioned, and as some of you have pointed out, the wording is open to interpretation and hardly enforceable under EU law.

On a side note, are PCG reliable/decent accountants? They seem to have a great "getting started" package that does the company formation, taxes, book keeping, Insurance, etc.

I just wanted to see how people had found them over competitors or would I be best just getting a 3rd party accountancy and use the PCG guys for templates, insurance and advice?

Remind me at the end of all this to hand out a few I.O.U beer vouchers!

Thanks,

Mr.T

**malvolio** · 8 September 2011, 10:16

Originally posted by MrT View Post

Hey Everyone...again!

Loads of good stuff coming back, thanokyou all so much!! So just a quick response to some of the questions around my current employment and contract you have asked about.

There is a clause in my employment contract (supposedly) but I have asked for a copy from hr as I signed it about 5 years ago and think its in a box at home...somewhere!

However a colleague of mine has just done the exact same thing I am talking about and apparently the cost/hassle of actually going after employees far outweighs the salary they pay us so unless your a VP they don't typically bother unless your on silly money or important to the company (...not that I'm not,right?!).

He also mentioned, and as some of you have pointed out, the wording is open to interpretation and hardly enforceable under EU law.

On a side note, are PCG reliable/decent accountants? They seem to have a great "getting started" package that does the company formation, taxes, book keeping, Insurance, etc.

I just wanted to see how people had found them over competitors or would I be best just getting a 3rd party accountancy and use the PCG guys for templates, insurance and advice?

Remind me at the end of all this to hand out a few I.O.U beer vouchers!

Thanks,

Mr.T

PCG aren't accountants. They are the Trade Body representing the freelance contractor community (all 1.4 million of them) and provide a range of supporting services to assist their members. They aren't in this for the money and aren't in competition with other commercial organisations in any real sense of the word. Shame you hadn't got that from their website, looks like I shall have to have a word with somone...

The One Stop accountants are all PCG accredited, which means they understand freelancing in great detail. Mostly they are pretty solid accountants as well. You can certainly trust them to deliver what it says on the tin. However if yuo don't want to use One Stop (which is not as expensive as it looks) join as a standard or Plus member and get your own accountant. Plenty of recommendations on these boards for who to use Nixon Williams, InTouch, SJD and so on. They won't do anything differrent in terms of company formation and getting bank accounts though.

**SueEllen** · 8 September 2011, 11:44

Originally posted by MrT View Post

Hey Everyone...again!

Loads of good stuff coming back, thanokyou all so much!! So just a quick response to some of the questions around my current employment and contract you have asked about.

There is a clause in my employment contract (supposedly) but I have asked for a copy from hr as I signed it about 5 years ago and think its in a box at home...somewhere!

However a colleague of mine has just done the exact same thing I am talking about and apparently the cost/hassle of actually going after employees far outweighs the salary they pay us so unless your a VP they don't typically bother unless your on silly money or important to the company (...not that I'm not,right?!).

He also mentioned, and as some of you have pointed out, the wording is open to interpretation and hardly enforceable under EU law.

No the wording isn't open to interpretation it actually depends on what the specific wording is in the contract.

If the clause is not specific then it doesn't tend to be enforceable. For example if they state you can't work with a client, that client's subsidiaries and that client's customers, and their client is say a large well-known telecoms company in the UK then it wouldn't be enforceable.

However if the clause stated something like you can't work for the client you had 3 months prior to leaving the company for a period of 6 months after you leave in the same capacity then it would be specific .and easier to enforce. Though whether the company will try and enforce depends on whether they have money to throw away on lawyers fees.

Getting Started with Contracts (The legal stuff)