There are lots of crucial nitty-gritty elements to starting your business, including key legal documents which could help you avoid pitfalls in the long run, from customer disputes to employee claims and the illegal disclosure of your company’s confidential information.
The Essential Startup Legal Checklist
Here’s what you’ll need—and why each of these legal documents matters:
- Company Incorporation Documents
- What it is: These are the basic documents you need to officially register a limited company.
- Why it matters: They show you’re legit and define how your business is structured under the Companies Act 2006.
- When you need it: Right at the start—when you register with Companies House.
- Shareholders’ Agreement
- What it is: A contract between your shareholders that outlines rights, responsibilities, and what happens if someone wants out.
- Why it matters: No one wants surprises later. This helps avoid fallouts and keeps everyone on the same page.
- When you need it: As soon as you bring in other shareholders.
- Partnership Agreement (if you’re not setting up a company)
- What it is: It spells out each partner’s role, profit split, and who’s responsible for what.
- Why it matters: No handshake deal can cover everything. This makes it official and protects all sides.
- When you need it: Before your first sale. Ideally, before your first meeting.
- Privacy Policy (GDPR Compliance)
- What it is: A simple explanation of how you collect, store, and use personal data.
- Why it matters: GDPR is the law. If you collect customer info—even an email address—you need to be transparent.
- When you need it: As soon as your website goes live.
- Employment Contracts
- What it is: An agreement between you and your staff that covers pay, working hours, holidays, and more.
- Why it matters: By law, you have to provide new employees with written terms within two months.
- When you need it: Any time you hire someone—part-time, full-time, or freelance.
- Website Terms & Conditions
- What it is: Rules for using your website or buying from your online store.
- Why it matters: They protect you from legal issues around things like refunds, deliveries, and customer complaints.
- When you need it: The second your website is live—even if it’s just a landing page.
- Non-Disclosure Agreements (NDAs)
- What it is: A simple contract that protects your business secrets when talking to outside people—like freelancers, potential investors, or partners.
- Why it matters: It helps stop others from stealing your ideas or sharing info without your say-so.
- When you need it: Before any big conversations about your business.
Other Optional Documents
Depending on your business, you might also need:
- Lease Agreement – if you’re renting office or retail space
- Consultancy Agreement – if you hire contractors
- IP Protection – like trademarking your logo or registering a copyright
- Health & Safety Policy – if you have a physical workplace
A little more on some of the key legal documents as follows:
1.Business Terms and Conditions
Your business’ terms and conditions are critical to its long-term success and can be applied to sales or services. They should be clearly worded and easy to understand, specifically outlining the responsibilities that apply to you and your customers, including payment terms and ownership of products or services prior to payment.
Not only do ‘T&Cs’ portray your company as professional, but they also protect your rights and those of your customers, allowing you to redress and protect yourself from liability should anything go wrong.
2. Website Terms and Conditions
When launching your business’ website, the terms and conditions should always be included on the website and accessible via a link in the footer of every web page. For e-commerce websites, there are strict regulations on what must be included in the terms and conditions. For example, full details on your company’s returns, the order and delivery process, refunds, and losses policies must be given, as well as any disclaimers limiting your liability.
3. Privacy Policy
To ensure compliance with the Data Protection Act, you must include a clear, simple privacy policy on your website explaining what data will be gathered, how and why that data will be used, and how your website uses cookies. This is especially important for e-commerce websites where sensitive credit card information is being submitted.
4. Employee Contracts and Handbooks
Issuing an employee handbook can prove immensely useful for your business, as it will outline all of the practices and procedures to be followed by your employees, laying the foundation for agreeable professional relationships and smooth business operations. Handbooks should clearly state your company’s health and safety policy, your equal opportunities policy, and disciplinary and grievance procedures.
Employers in the UK are legally required to provide employees with a written statement of their employment terms within two months of their start date. However, this doesn’t offer as much protection for either the employer or employee as a comprehensive employee contract.
5. Any Relevant Licences
Depending on your industry, your business may require various licences in order to comply with the relevant regulatory bodies. This means first finding out whether you need a licence, registering with the appropriate regulatory body in order to use your professional title and carry out your business. For example, private landlords and letting agents require a licence from their council to rent out Houses in Multiple Occupation where a house has been converted into flats for several occupants.
Businesses involved in food and drink, hospitality, healthcare, and finance also usually require a licence, as do any businesses selling alcohol.
Failing to properly register your business and acquire a licence could incur severe penalties, which could cripple your business, so it’s essential that you consult a qualified lawyer to have the necessary licences in place for your business.
No matter how inconvenient or cumbersome it may seem to get all of your legal paperwork in order, these documents are the building blocks of your business that will allow it to thrive while protecting you from the risk of penalties or liabilities later on.
For more information, or for expert advice on business or personal legal issues, call us on 020 3475 6751 or via email at info@carterbond.co.uk
This content is not intended to be used as a substitute for specific legal advice or opinions. No recipients of content from this site should act or refrain from acting on the basis of content of the site without seeking appropriate legal advice or other professional counselling.
