I Run a Software Company in England.  What Legal Documents Do I Need?

As part of your responsibilities running your software company, you must ensure you have all the necessary legal documents to protect your business. Due to the ever-increasing digitalisation of our world, software businesses continue to thrive worldwide. Naturally, this means an ever-increasing number of software companies are launching in England. All businesses must have relevant legal documents to comply with the law and achieve their aims. 

This article will explore the most important types of legal documents for your software business, so it can spend less time worrying about documentation and more time growing and evolving.

What Legal Documents Will Help My Software Business?

Whilst English law requires businesses to have many documents, some are more crucial than others.  In this way, this article will focus on the following key legal documents:

• privacy policy;
• freelancer agreement; and
• website terms of use policy.

Let us explore the benefits of each document in turn below.

1. Privacy Policy

This legal document informs clients and customers how your organisation will handle their personal information. The General Data Protection Regulation (GDPR) requires businesses in England that handle personal data belonging to individuals to put these policies in place.

Many business owners quickly obtain legal assistance in drafting privacy policies and publishing them on their websites because failure to do so can constitute a breach of the GDPR. Unfortunately, any violation of the GDPR is punishable by a hefty fine of up to £17.5 million.

A good privacy policy will do the following:

• provide understandable information on how your software company will handle their personal information;
• avoid complicated jargon or overly vague phrasing;
• explain why your business needs to collect personal data and why it believes it is lawful to do so;
• provide contact details for an individual who can respond to any queries or complaints regarding personal data collection; 
• confirm likely storage periods for different types of personal information; and
• confirm that an individual can complain to the Information Commissioner’s Office (ICO) concerning the collection of their personal data.

Some business owners find it tempting to use free template privacy policies from the internet.  Unfortunately, the ICO clarifies that you must tailor a privacy policy to the business in question. Consequently, any failure to do so may constitute a breach of the GDPR. In this way, using a privacy policy from a local gym for your software business is highly risky.

2. Freelancer Agreement

Due to the demand-driven nature of many software companies, alongside the likelihood of individual projects for customer businesses, freelance work is commonplace.

A good freelancer agreement tends to confirm the following:

• how you pay the individual, for example, whether they receive payment on a fixed-fee basis upon completion of a project or weekly or monthly;
• whether the freelancer needs to provide their own equipment or whether you will provide company property (and the terms for the return of any loaned equipment);
• confirmation of who owns the software, code and designs the freelancer creates (usually the instructing software company); 
• whether the freelancer requires a subscription to any pieces of software or online databases (or confirmation of your company providing log-in information for such); and
• details of how either party can give notice to terminate the freelance arrangement.

Naturally, it is also essential to have a good contract of employment template in place. However, most freelance positions require more urgency when providing swift documentation.

Additionally, many software companies prefer individuals with experience working for various software businesses, which grants them expansive and varied experience levels.

3. Website Terms of Use Policy

Almost every software company will rely heavily on having an effective online presence. In fact, many will view their website as a fantastic opportunity to demonstrate their programming expertise.

As with everything important to your business, it is crucial to put a document in place to allow you to manage things effectively. A website terms of use document is a rulebook for your website users.

A good website terms of use document will address the following:

• the scenarios in which your organisation will ban an individual from using your website;
• that images and text cannot be copied and used elsewhere without your organisation’s prior permission (thus protecting your intellectual property and confidential information);
• that your company is not responsible for any damage to electronic devices suffered through the use of the website (for example, malware or computer viruses); 
• that your organisation accepts no liability for any sections of the website containing comments made by others (for example, any comment sections below blog posts); and
• that use of your website constitutes an acceptance of the policy’s rules.

Key Takeaways

While all businesses require some form of legal documentation, software businesses tend to prioritise some documents over others, dependent on their needs. The three types of documentation mentioned above are crucial to running a successful software-related business in England. However, each document is complex by design. Due to this, many software business owners choose to have them drafted and prepared by law firms.

If you need advice on effective document management for your software business, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page. 

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