Business Questions

April 11, 2014 5:44 pm

In a tangle over social media

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Roger Beale cartoon

I manage a company placing senior executives in the IT industry around the world. One of our employees is leaving. He has created and manages a very popular LinkedIn group and Twitter feed and he wishes to take both with him. The LinkedIn group is in the company name, but the Twitter feed is in his own. Who actually owns this group and the Twitter followers?

Although social media accounts created in the course of employment for business purposes belong to the employer, it can be difficult to prove that the accounts were set up “for business”, particularly if they are used for both business and social purposes.

Factors to consider are whether the LinkedIn group is in the company name, whether the group was set up by you, or on your instructions, whether anyone else has access to the group and whether you have a policy dealing with the use of social media. Also, ask whether there is a requirement in the employee’s employment contract to share the username and password with you on termination of employment.

The Twitter account is in the employee’s name, so it will be more difficult for you to establish a claim on ownership, especially if the account was created before the employee joined the company or if the employee tweets personal messages.

To avoid these issues, ensure that social media accounts are registered using a company email address, require employees to replicate business contacts on their own social media account on to your databases and consider requiring employees to delete all social media connections that have been made through their employment when they leave. It would also help to insist that employees give back their usernames and passwords on leaving employment and include guidance on account ownership in your social media policy.

Rahul Thakrar is a corporate solicitor at Boodle Hatfield, a law firm

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Liquidity problems after flooding

I run a marketing agency in southwest England, which has been affected by the recent floods. We rent commercial space in the basement of an office block. Our office has been severely damaged and we have had to sublet elsewhere. This has dramatically affected our cash flow as I am still paying my employees and now this new office space. While my landlord has apologised and promised to fix the problem, he says he is not liable for a natural disaster and therefore I can’t receive compensation. Is this correct? What are my rights?

Any claim against your landlord for damages because of the flooding will depend upon the landlord’s covenants in your lease. I assume you rent part only of the office block; normally the landlord will covenant to keep the office block’s structure, exterior and common parts in repair and you covenant to pay a service charge which would include a proportion of the landlord’s costs of keeping the office block in repair.

If you can prove that the reason the flood made your offices unfit for occupation was that the landlord failed to carry out his repairing obligations, you would have a claim for your losses, which would include the cost of alternative accommodation and possibly compensation for loss of business. However, that is a difficult claim and to prove it you would need specialist surveyor’s advice. If your office was not flooded because of the landlord’s breach then if the landlord covenanted to make good any damage to the structural, exterior and common parts of the office block he must so do no matter how the disrepair was caused.

The landlord usually covenants to insure the office block against a number of risks again those risks usually include flooding but it may be that the office block has flooded before. I note that your landlord says he is not liable for flooding and assume that means that he has not insured against flooding. You should check your lease because that will tell you what the insured risks are.

Unless your lease states that no rent is payable if your offices become unfit for occupation, then you are liable to pay rent and service charge even when you cannot occupy. I advise you to check your insurance policy to see if it covers flooding or payment of rent if your offices become unfit for occupation. I have assumed, as is normal in a lease, that the internal repair of your offices is your responsibility.

Finally the government has said it will provide financial assistance to small businesses affected by flooding in England. You should investigate that.

Michele Freyne is a partner and head of real estate litigation at HowardKennedyFsi, a law firm

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Granted, it’s a minefield

My business, which is in transport technology, is in the process of applying for a number of government grants. However, concerns have been raised over how we account for these grants, and particularly whether grant money can be used to cover wages and expenses. What is the best way to manage grant money?

Government grants and funding streams, such as those made available by the Technology Strategy Board, are typically made to assist in the delivery of very specific projects, and the documentation will stipulate how that money can be spent.

Grant applications will require you to forecast and provide a breakdown of project expenditure, and it is usual that this will include salaries and expenses that can be specifically allocated to the project. Care has to be taken, however, that the costs reclaimed are those that the company has to meet as opposed to an inflated salary rate.

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Within their terms, some grants require the expenditure to be made upfront with the grant effectively reimbursing that expenditure. That can, obviously, cause difficulties if funds are tight. It is important that detailed records are kept on how the grant money is spent. It is usual for the grant-making body to require external verification of grant expenditure.

If the money is not spent in the way the grant documents stipulate or excess has been claimed then the awarding body can require it to be returned. It is, therefore, important that if you do receive grant funding you understand the specific requirements of your grant and comply with them. You should examine the documentation closely and ensure that the grant expenditure is documented as required.

Sue Staunton is a partner and the head of the technology practice at James Cowper, an accountancy firm

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