Must-Have Legal Documents for Small Businesses
As a start-up or small business owner, your to-do list might feel endless. It’s easy for legal documents to fall to the bottom of your priorities. However, having the right legal protections in place is essential for your business's success and security. Below is a list of key documents every small business should consider.
For Limited Companies
Articles of Association
The Articles of Association are the governing document for your company, outlining its rules and structure. If your business has multiple shareholders or requires different share classes (e.g., for varied dividend rates), bespoke articles are a necessity. However, most small businesses find that the default "model articles" provided during incorporation are sufficient.
Although this document can be lengthy, it’s worth reviewing to understand what you can and cannot do under your company’s governance.
Shareholders' Agreement
If your business has multiple shareholders—such as partners, spouses, or family members—having a shareholders' agreement is critical. This agreement defines how shareholders will interact with the company, outlines key financial principles, and addresses what happens if someone wants to leave the business.
For example, who can a departing shareholder sell their shares to? Do remaining shareholders have the right of first refusal?
While it’s tempting to assume that business relationships will always remain amicable, disputes can and do arise. Having a shareholders' agreement in place can save you significant financial, emotional, and legal stress.
For All Businesses (Limited Companies and Sole Traders)
Terms and Conditions / Supplier or Client Agreements
Whether you’re selling products or services, it’s essential to define the terms on which you do business. A clear set of terms and conditions helps you manage risks by outlining:
Payment terms
Deliverables
Warranties and liabilities
Governing law and jurisdiction
Without your own terms, you risk being subject to a third party’s terms or relying on statutory legal positions—neither of which is ideal. While templates are widely available, it’s best to work with a legal specialist to create bespoke terms that suit your business needs.
Website Terms and Privacy Policy
If your business has a website, ensuring legal compliance is crucial. This includes having:
Website Terms of Use: Establish how visitors can interact with your site.
Privacy Policy: Ensure compliance with GDPR and the Data Protection Act 2018, which governs how you collect, store, and use personal data.
Every business collects and processes data differently, so a tailored privacy policy is essential to avoid fines and build client trust.
Additional Documents to Consider
While the above are essential for most businesses, depending on your operations, you may also need:
Confidentiality/Non-Disclosure Agreements (NDAs)
Sub-Contractor Agreements
Director Service Contracts
Collaboration Agreements
Master Service Agreements and Statements of Work
Take Action
Having the right legal documents in place not only protects your business but also builds trust with your clients and partners.
💬 Book a free 30-minute consultation to learn more about your business’s legal needs and how we can help.