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Documents for your business

Five essential legal documents every business needs

When starting up your own business, one of your top priorities should be making sure that you have covered the legal fundamentals. There are many good reasons why you should get legal help from the outset.

Let’s say you’ve just set up your business but then decide to partner with someone – possibly a friend or family member – it’s best to have a partnership agreement in place. You may think this sounds official, but without this type of agreement, all sorts of disputes, misunderstandings and arguments could happen in the future, even between the closest of friends.
Or your business may be taking off and you may be employing your first staff to help you expand. Knowing that you are legally required to set out the terms of employment for new staff in a contract can be a worry if you don’t know how.

As your business grows, it’s really worth taking a step back, sorting out your legal affairs, and ensuring that everything you are working hard to achieve is protected.

  1. Employment contract

Employment contracts are not only a legal necessity, they can also help set the tone of your business. They are a great way to set out clear expectations for the employer and employee, laying the foundations for a mutually rewarding relationship. An employment contract should cover key areas such as pay, benefits, hours, holiday, sickness and termination.

  1. Confidentiality agreement (Non-Disclosure Agreement)

An NDA is the first step to protecting your ideas and intellectual property when sharing confidential information with other individuals or businesses. It is the easiest and most common way of ensuring that this information is not made public or exploited in any way. It also means that in the eventuality of any breach of contract, you can take legal action to implement any solution needed to rectify or prevent further breaches and recover damages. 

  1. Partnership agreement

Avoid potential conflict when you enter into a partnership by having in place a detailed and complete partnership agreement of what is expected from each of the partners and how the business will be run under the new partnership. This document should cover who the partners are, their rights and responsibilities, and what will happen if and when they decide to leave the partnership.

  1. Health and safety policy

If you have five or more employees, you are required to have a written Health and Safety Policy. Not only does having one demonstrate that you are a responsible employer, it also gives staff the confidence that they are working in a safe environment, protecting them from injury and you from liability.

  1. Letter Before Action

Good cash flow is essential for a successful and healthy business but late payment from customers and other businesses is something that is becoming more prevalent. If they are late in paying your invoice, send a formal late payment reminder letter and a follow-up second late payment reminder letter for any stragglers. If this fails to have the desired effect, send a letter before action – this final demand letter will demonstrate to a court that you have offered all reasonable measures to settle the debt before you commence legal proceedings.


Mark Edwards

Vice President & General Manager UK at Rocket Lawyer
Mark has a decade of experience as an innovator and business leader in the UK legal industry, specialising in creating and growing new businesses based on sound market insight and customer need. As the General Manager of Rocket Lawyer UK, he is focused on growing the business which launched in November 2012.