Gannons Solicitors 020 7438 1060
London solicitors specialising in the law relating to employment, partnerships/LLPs and company commercial
We have set out below a checklist of areas you need to consider when entering into a consultancy agreement.
Overview
a) Does the individual (consultant) want to provide their services through a service company (consultant company)?
b) If it is through a consultant company, is the consultant the controlling shareholder and is there an employment contract between the consultant and the consultant company?
c) If it is not through a consultant company, is the proposed engagement a contract for services and not a contract of service under which the consultant will be an employee of the company?
d) If it is not through a consultant company, is the consultant a worker? Implications under IR35.
e) Will the consultant have continuing authority to negotiate or conclude the sale or purchase of goods on behalf of others? If so, the consultant will be a commercial agent and the commercial terms of the agreement may need to be reconsidered.
What are the names and addresses of the consultant, consultant company (if applicable) and the company?
a) When did the engagement begin (or when will it begin)?
b) Is the consultancy agreement to be for a fixed term or terminable on notice by either party?
c) How are disputes to be managed and resolved. Dispute resolution procedures.
a) What is the nature of the services that the consultant will be required to provide?
b) Will the services need to be provided to any other group companies?
c) Will the consultant be able to provide a substitute? Does the company want the right to veto the substitute? Does the company want an indemnity form the consultant in relation to any claims by the substitute against the company?
d) What is the position with regard to remedial work (if relevant)? Will the consultant be required to remedy any faults in the work after termination of the consultancy agreement for no extra fee?
a) Is the consultant/consultant company (as applicable) VAT registered?
b) Is the consultant to be paid a set fee? If so, is the fee to be paid at fixed intervals (for example, monthly or quarterly) or only on completion of a particular project?
c) How will expenses be approved? Will they be agreed in advance, subject to an upper limit or just submitted on a "reasonably incurred" basis?
a) Is the consultant involved in any competing business? If so, is the company prepared to consent to the consultant's continuing involvement in that business? (NB this may affect the employment status of the consultant).
b) Does the company want to prevent the consultant being involved in any competing businesses during the engagement?
a) Does the company have specific types of confidential information that it would wish to protect during the engagement and after it has terminated?
b) Does the company want to have a confidentiality undertaking from any substitute appointed by the consultant to provide the services?
c) Does the company want to impose post-termination restrictions on the consultant (for example, a non-solicitation restriction with regard to the company's employees or customers)? Does it want to impose similar restrictions on any substitute?
a) Will the company require an assignment of copyright and intellectual property in relation to work created during the course of the engagement?
b) Does the company want to obtain a similar assignment of copyright from any substitute appointed by the individual to provide the services?
Has the company confirmed that the consultant has adequate insurance in connection with the provision of the services (whether by the consultant or any substitute)?
Will the consultant have use of any company property that should be returned on termination of the engagement?
This paper is designed to provide a summary of the issues addressed. Therefore, it is not intended as a detailed commentary on the relevant law and any comments made should not be acted upon without first taking specific legal advice.