A legal expert has outlined the key documents agents and suppliers need before setting up a travel business to avoid risky and potentially damaging disputes.
Speaking during the Start-ups: An introduction to the travel industry webinar on Wednesday, she said: “If there’s ever a disagreement down the line, you do not want to be scrabbling through your emails to find there’s trail between you or have a debate about something you agreed verbally.
“What you want is a written contract which actually sets out those terms that you can point to.”
Even though United Kingdom has left European Union, the EU General Data Protection Regulation (GDPR) has been retained in UK law, and applies alongside the Data Protection Act of 2018.
“Where you fail to comply with data protection laws you could have some issues,” she said. “The maximum fine that could be imposed where you’re in breach of data protection in UK legalisation is £17.5 million or up to 4% global turnover for non-compliance – if that is higher.”
Emma Shakespeare, a senior associate at Travlaw, urged those wishing to set up a travel firm to draw up a ‘heads of term’ document for shareholders and investors which sets out “what the key understandings are between the parties and what you are going to bring the business proposition”.
“It’s important to go through that at early stage to make sure everybody is aligned,” she said, adding that it is important to have a shareholders’ agreement that stipulates an exit strategy for shareholders.
Shakespeare added: “If a shareholder wants to leave the business will the others have the right of first refusal on their shares? What if you receive an offer from a third party? Can one shareholder drag another along?”