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D Michael Rose

Q: Starting a children's casting agency

I have put together plans to create a casting agency in my local area for children. Altogether I have a starting figure of 300 children who would like to join and use the agency. Apart from having checks from the local police force, what other legal red tape will I have to go through in order to start up?

A: There are the usual things which have to be done or considered when starting up any new business of any kind. For instance, and by way of example only, whether to trade as a limited company or partnership or as an individual and the tax implications of such a decision, whether you will need to register for VAT, notification to Inland Revenue and tax returns, trade name and trade mark considerations, town planning use of whatever premises you intend to trade from, any staff employment contracts and PAYE requirements, accounting procedures and appointment of accountant/auditors and so forth.

It is no longer necessary to have a licence for setting up an employment agency but there are numerous statutory regulations with which you will need to familiarise yourself in relation to the conduct of such an agency. These are too numerous for me to mention within the space I have available but they include, for example, the need to set up a special client account at your bank for ring-fencing clients' money passing through your hands. The regulations are currently under substantial review by the Department of Employment and extensive new regulations which tighten up considerably the conduct of employment agency businesses - including that of entertainment agents - are expected to come into force this autumn, on which you will need further advice.

I understand, however, that the main focus of your question relates to the fact that you will be doing business for children, so I will concentrate the rest of my response on that.

A child or young person under the age of 18 does not have the capacity to enter into a binding legal contract under English law, with certain limited exceptions - one of which is a contract of employment on terms regarded as beneficial to the child. Even then, a young child will hardly have the mental capacity or experience to exercise any judgment on contract terms and the law will provide protection against the child being exploited. Accordingly, it is absolutely imperative that all contractual arrangements which you make in respect of the children on your books should be made in each case with a parent or guardian of the child concerned. Otherwise the contract may be unenforceable.

You should ensure in each case that the contracting party warrants his or her status as the parent or guardian of the child concerned and that as such will accept personal liability for the due performance of all contractual obligations relating to the child's conduct.

Furthermore, if the child, though below the age of 18 and therefore lacking in legal capacity, has nevertheless reached an age of discretion, as in the case of most teenagers, it is desirable, if not essential, that before setting up a contractual commitment for the child you obtain the child's approval as well as that of his or her parent or guardian, bearing in mind that children have been known to rebel against the wishes of their parents. You should also make it absolutely clear to the hirer of the child's services that you accept no personal liability for what the child does or fails to do and that the hirer must look to the child's parent or guardian for due performance.

You will also need to familiarise yourself with the regulations relating to child performances. In certain circumstances a special licence is required from the local authority and there are regulations covering a host of matters, such as chaperoning, maximum number of permitted performing days per annum, night work, travel and educational requirements and so forth. For a more detailed summary, reference may be made to my Legal Eagle column in the The Stage's issue of November 11, 1999, which can be found on The Stage website under 'Children's licences/working on stage and TV' under 'Contracts'.

First published September 2002

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