Get started on your business journey. This article is part of our start-up hub, which is home to even more tips and expert advice on starting your own small business.
Setting up your own small business is exciting, but organising the paperwork is a time-consuming job as a new business owner. Whether it’s forms, contracts, agreements, letters, notices, or policies, there are so many types of legal paperwork that you will encounter depending on your business structure and sector. Your legal documents should also be reviewed and updated regularly, or you may risk fines and penalties.
To get you started, our experts at FSB Legal and Business Hub share some important legal documents you need to have, so you can make more time to run and grow your new business.
Having documentation that registers your business, covers any tenancy for your premises, protects individuals’ data, sets out contractual agreements, and protects intellectual property (where relevant), is vital in order to protect your business and its products and services.
In the event that someone breaches an agreement with you, or if, for example, there is a dispute over property you’re using, having this type of documentation readily available can be invaluable.
- Companies House and/or HMRC papers
- Data protection documents
- Tenancy agreements for your premises
- Details of financial agreements
- Contracts for goods and services
- Intellectual property
As a new business, managing your cash flow will be vital, especially if you’re looking for funding opportunities later down the line. With late payments all too common, there are documents that can help you to get paid sooner, such as:
- An invoice with all the necessary information about payment terms
- A letter before action warning of legal action if payment is not made after other steps have already been taken, like adding interest and payment plans
Whether it’s completing your self-assessment or staying on top of your company accounts, being your own boss means you’ll have the responsibility of managing your business’ finances.
Any information which is provided for tax purposes should be kept for your records. If you’re ever subjected to a tax investigation by HMRC, having easy access to papers, such as your past records, can make locating and providing the information you’ll need much quicker.
Examples of the documents you need to keep include:
- Bank statements
- Record of expenses
- Past tax returns
Dealing with your business taxes can be overwhelming if you’re new to the world of self-employment. Don’t worry - our free small business taxes guide has got you covered, including how you can comply with Making Tax Digital legislation.
Health and safety
Health and safety violations in the UK can see your business hit with fines from the Health and Safety Executive (HSE). These regulations are in place to protect you, your customers, and your employees. Depending on your industry, there may be specific laws that you need to adhere to, such as if you deal with chemicals or machinery.
Examples of documents you may need to keep and regularly update include:
- Risk assessments (in writing if you have five or more employees)
- Health and safety policy (in writing if you have five or more employees)
- If you have employees, a health and safety law poster must be displayed in your premises or given to employees
- Accident and incident reports
Get started with our free guide to health and safety compliance for small businesses.
Lastly, even if you’re only starting out with one or two employees, it’s still important to ensure that you’re compliant with employment law. Documents like employment contracts ensure each employee is protected by a statement with certain specified employment terms, which is a legal requirement.
As an employer, you’ll also need to consider grievance, disciplinary, and HR procedures. Demonstrating that you have the correct policies in place is vital, especially in the event of an employment tribunal.
Why your small business needs the right legal documents
Keeping your documents updated and compliant can be a time-consuming task that pulls you away from focusing on other areas of your business. However, it’s so important that you have the correct legal documents when setting up or running a business to avoid any fines or investigations where possible.
Being a new entrepreneur is exciting, but we know you’d rather be busy running your business than buried in paperwork! That’s why at the Federation of Small Businesses, our members can save time and money with an online legal library home to over 1,400 legal documents, templates, and factsheets that you can download and customise for your business.