If you have just started a new business, the first few months have likely been a blur. You are building your customer base, potentially hiring new staff, and trying to keep up with the admin side of running a company. Legal paperwork rarely makes the top of your to-do list, which is understandable, but it can prove more expensive in the long run if something goes wrong.
Most of the complications and disputes Rose & Rose deals with come from situations where the right document was never put in place at the start.
In this blog, our business law team looks at the key legal documents all new business owners and founders need in place, along with a few other legal considerations that often get forgotten.
What Documents Should New Businesses Have in Place?
If you have recently launched your business, the documents below cover the essentials, from what you need from day one to what can wait a few months. Either way, here are the key documents our business law team recommends you have on hand before it’s too late.
1. The right business structure paperwork
Before you have a single customer contract in place, you need to know what your business legally is. If you have set up as a sole trader, you may not have any company paperwork at all, but you do still need to register for self-assessment with HMRC.
If you have incorporated a limited company, the basics include:
- A certificate of incorporation from Companies House
- Memorandum and articles of association
- A statutory register of members, directors and people with significant control (PSC)
- Initial board minutes
- A confirmation statement filed annually
For LLPs and partnerships, the equivalent is your LLP or partnership agreement, setting out who the partners are and how the business is run. Many partnerships lack one because the founders never got round to it. A “partnership at will” defaults to provisions in the Partnership Act 1890, which are rarely what anyone would actually agree to if asked. Read more about our Business Start-Up services for more information.
2. A shareholders’ agreement or partnership agreement
If you have set up your business with anyone else, this is the single most important document you will sign. It governs:
- How decisions get made
- What happens if one of you wants to leave or sell
- What rights each of you has if things go wrong
- How disputes will be resolved
- Whether departing founders can compete with the business afterwards
Setting up this document now, before you need it, is far more cost-effective and efficient. Putting an agreement in place when everyone is on good terms costs a fraction of what it costs to sort out a dispute later. You can read more on our shareholders’ agreements page or partnership and shareholder disputes page.
3. Customer terms and conditions
Most disputes between businesses and their customers come down to what was originally agreed to. If you do not have written terms, it can be difficult to prove what was said in that conversation.
Written terms that customers have actively accepted protect you on the issues that matter most:
- Payment terms and interest on late payment
- Limits on your liability if something goes wrong
- Who owns the work you produce
- How disputes will be resolved
- What happens if a customer cancels
Take some time to look at how you currently send terms to customers, or ask a solicitor to review these for you. If they are tucked into the footer of an email or buried on a “legal” page nobody clicks, you may have less protection than you think.
4. Supplier and contractor agreements
The flip side of customer terms. If you take goods or services from someone else, you want clarity on quality, delivery, price, and what happens if they let you down. The most common gaps we see are:
- No service level standards
- No remedy if performance is poor
- No clarity on ownership of work product, particularly with freelancers and developers
- No clear termination rights
5. Employment contracts and a staff handbook
If you have hired anyone, you must give them a written statement of their main terms of employment on or before their first day. In practice, most employers issue a proper employment contract, supported by a staff handbook covering policies on grievances, discipline, holiday, sickness, IT use and equality.
The clauses that protect the business, including confidentiality, intellectual property, and restrictive covenants, are often the ones missing from templates pulled off the internet. They are also the ones you will wish you had when an employee leaves to set up in competition. Our employment solicitors can provide a wide range of employment law services for businesses, including employment contract drafting, if you need a steer on what should be included.
6. Confidentiality and NDA agreements
If you talk to investors, potential customers, contractors, or anyone else about the inner workings of your business, an NDA is an important document that gives you a route to action if information ends up where it should not. We use them most often for:
- Pre-investment conversations
- Discussions with potential business partners
- Engaging freelancers and contractors
- Negotiations about acquisitions
7. Data protection documents
UK data protection law was updated in 2025 by the Data (Use and Access) Act 2025 (DUAA). The main provisions came into force on 5 February 2026, with the remainder being phased in up to June 2026. The DUAA does not replace UK GDPR, the Data Protection Act 2018 or the Privacy and Electronic Communications Regulations 2003 (PECR). It amends them, with the aim of making compliance easier for businesses while keeping privacy protections in place.
Almost every business handles personal data, whether that is details of customers, suppliers, employees or website visitors. Under UK GDPR and the Data Protection Act 2018, you should have in place:
- A privacy notice for your website and customers
- A record of processing activities (ROPA)
- Data processor agreements with any third parties handling data on your behalf
- A cookie banner and policy that reflects the updated rules under DUAA
- Procedures for handling data subject access requests (DSARs), which now only require “reasonable and proportionate” searches and allow you to “stop the clock” while you seek clarification from the requester
- Registration with the Information Commissioner’s Office (ICO) and payment of the annual data protection fee where required
From 19 June 2026, businesses will also need a formal complaints procedure so that individuals can complain directly to you about how you handle their personal data, before they take the matter to the ICO. You will need to acknowledge complaints within 30 days and respond without undue delay.
It is worth putting this in place ahead of the deadline rather than after.
8. A lease or licence for your premises
If you trade from anywhere other than your kitchen table, you probably have a lease, a licence or a serviced office agreement. Each of these creates very different legal positions. A lease is a much more substantial commitment than a licence, and the obligations can run for years. Before you rent commercial premises, have a commercial property solicitor look at the terms before you sign your lease agreement.
Your Personal Legal Documents Matter Too
The documents above protect the business you are building. Below, we look at the wider legal documents that can protect what happens to it, and to you, if life takes an unexpected turn. New business owners often forget that their personal legal affairs need attention too, and the consequences of not getting these in place can be far more disruptive to a young business than most founders realise.
- A Will: If you own shares in a company or have an interest in a partnership, those interests pass under your Will when you die. Without a Will, the intestacy rules decide who gets what, and that may not match what you would want. For business owners, a Will is also the place to think about:
- Business property relief and inheritance tax planning
- Whether shares should pass to family or to a co-founder
- Who should act as your executor if the estate includes a running business
- How a family member who has nothing to do with the business is provided for
Our Wills & Probate team works closely with our business law solicitors on exactly this. Putting a business through probate without a properly drafted Will can be slow, expensive and disruptive to trading. You can read more on our Making Your Will page.
- A Lasting Power of Attorney: A Will deals with what happens when you die. A Lasting Power of Attorney (LPA) deals with what happens if you are still alive but unable to make decisions, for example, after a serious illness or accident. There are two types:
- A Property and Financial Affairs LPA, which covers everything from paying bills to running your business
- A Health and Welfare LPA, which covers medical and care decisions
For a business owner, a Property and Financial Affairs LPA is particularly important. Without one, if you lost capacity, no one would have authority to sign cheques, deal with the bank, or make decisions on behalf of the company. Your family would need to apply to the Court of Protection to take over, which is slow, costly and intrusive. Read more on our Lasting Powers of Attorney page.
- Pre-nuptial or Post-nuptial Agreements: Some couples may choose to set up a pre-nuptial or post-nuptial agreement to protect pre-marital assets, including businesses and investments. While these agreements are not currently legally binding in the UK or Wales, if correctly drafted, the English courts increasingly recognise their importance, and the circumstances under which they will not be upheld are limited.
Our Family Law and Divorce team works closely with our business law solicitors to help business owners with these types of documents, including in dealing with financial settlements in divorce. For related information, read our previous article, “How are Complex Assets or Businesses Handled in a High-net-worth Divorce?”
What New Business Owners Should Do Now
A sensible order of priority for a new business in its first year:
- Get your founder agreement (shareholders’ or partnership agreement) in place
- Get your customer terms drafted
- Get employment contracts ready before you hire staff
- Sort out data protection compliance
- Review or put in place your Will
- Consider a Lasting Power of Attorney
- Consider a nuptial agreement if you are married or getting married
Business Dispute Resolution
Disputes are an unfortunate but common occurrence in running a business. At Rose & Rose, our dispute resolution team has extensive experience in advising businesses in a wide range of commercial disputes, including:
- Partnership and shareholder disputes.
- Director disputes.
- Contract disputes.
- Commercial property disputes.
Our lawyers and litigators are highly regarded and act for businesses of all sizes facing issues. We can support clients in both High and County Courts and, where appropriate, can advise on alternative dispute resolution (ADR).
Speak With Our Business Start-Up Team
Please contact a member of our team below or email info@roselegal.co.uk to arrange an initial consultation to discuss the best way forward for you, and we will provide you with further and specific advice tailored to your circumstances.
This blog post is not intended to be taken as advice or acted upon. If you are seeking legal advice, please contact our team of solicitors.
