This video tutorial, created by Farillio and our expert Helen Smart from Wilkes, has been made to help freelancers with their own limited companies create a contract for supplying services to another business.
Whether you’re drafting a Farillio template agreement of your own, or looking to better understand the clauses and terms & conditions in an agreement that's been sent to you, our tutorials have been created with you in mind.
Welcome to the freelance contract tutorial for limited companies!
As part of Farillio’s goal, to help make law simpler, faster and more accessible for small businesses, this series takes the time to delve in to the areas of a standard contract for services that require that extra attention.
All the materials we’re looking at and discussing today can be found within your Farillio account. The Farillio template we’re looking at today was designed by Helen Smart and her colleagues at Wilkes. Helen is our expert on all things trading and data protection related.
Before we begin, if you’re a freelancer without a limited company (a sole trader), you'll want to instead use our tutorial for creating a contract for services that's tailored to sole trader freelancers (coming soon).
Why have a contract?
For freelancers, the contract for services is going to be one of the most important documents that you put into place.
Simply put, it helps the parties determine just what’s going to be covered. Things like payment terms, intellectual property (IP), confidentiality, delivery terms, quality terms and so on.
While it’s not always possible to impose your own terms on the other party, we still strongly recommend reviewing the terms you’re being asked to sign up to. Compare them with what your own terms look like, and have a read of our guide to ensuring you’re on trading terms you’re happy with (coming soon to Farillio) before you sign.
Sometimes these terms are very one-sided, especially when it comes to limitations of liabilities (or lack of them) or indemnities, so it's important to check that the contract is working for you, not just your client.
Before you get drafting
It’s really important, as a freelancer, to understand exactly what your services are, what your business does, what the risks are, what insurance you need and where you may need some limitations to your liability.
You should also understand what the IP position is; do you own any? Will you be assigning it? Will you be licensing it?
While you are contracting as a freelancer through your own limited company, you're still an individual freelancer that's performing the services – so you should also expect to create a separate document to assign the IP rights that you, the individual freelancer, will be signing (but more on that later!).
Another area we’ll be pausing to cover is the need for the contract to establish a relationship between two businesses, and not that of an employer/employee.
The rules regarding tax between freelancers and employees are very different and the government has cracked down on the practice of consultancy companies being used to avoid paying tax, in cases where freelancers are found to actually be acting more like employees.
Known as IR35, the law around this isn't always clear to freelancers and their clients – so we put a easy-read guide for you on the essential facts affecting freelancers and contractors (including IR35).
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