Sorting out legal documents might not be the most exciting part of starting a business, but it’s something you can’t afford to skip.
We have listed 10 documents that aren't just red tape—they lay the foundation for your business, keeping everything clear, compliant, and protected.
💡Legal documents in just minutes with Aatos’s service. We’ll guide you in every step of the process so you can focus on your business.
Why Do Legal Documents Matter?
Legal documents provide structure to your business relationships and operations. They clearly define roles, responsibilities, and expectations, reducing the likelihood of misunderstandings and disputes.
Beyond internal benefits, they ensure compliance with UK-specific laws such as the Companies Act 2006 and the General Data Protection Regulation (GDPR). Failure to establish these documents can lead to regulatory penalties, operational disruptions, and reputational damage—issues that could jeopardise your business’s survival.
💡Applying for a startup grant? Ensure all the necessary documents are prepared and in place before submitting your application for example to Innovate UK Smart Grants, the Prince’s Trust Enterprise Programme or the New Enterprise Allowance (NEA).
Benefits of Doing UK Business Registration Online
When registering your business online, there’s no need to draft certain essential documents manually, such as Memorandum of Association and Form IN01—they’ll be automatically created during the process.
To register your business online in the UK, visit the official government website HMRC Business Registration.
During the business registration process, you can:
- Register a private limited company: Submit your application directly to Companies House.
- Prepare necessary documents: The online process automatically generates essential documents, such as the Memorandum of Association and Form IN01, simplifying the registration.
- Pay the registration fee: The current fee for online registration is £50.
The online registration process is straightforward and typically takes around 24 hours to complete. Once registered, your company will receive a Certificate of Incorporation, confirming its legal existence.
💡 Memorandum of Association confirms the intent of the founding members (initial shareholders) to form the business and their agreement to become its members. It’s a legal requirement filed with Companies House during incorporation but is automatically generated when you register online.
💡 Form IN01 is the official application form to register a limited company with Companies House. It includes vital details like your company’s proposed name, registered office address, director and secretary information, and initial shareholdings. When you register online, this form is automatically completed as part of the process.
10 Legal Documents that Every Business Needs
We have identified 10 essential legal documents that every newly established business needs. Whether you’ve set up a sole proprietorship or a multi-owner startup, don’t overlook this list.
Additionally, we’ve included useful tips on invoicing and creating other key documents to help your business operate smoothly once it’s up and running.
1. Articles of Association: Your Business Constitution
If you’re forming a limited company in the UK, Articles of Association are mandatory under the Companies Act 2006. This foundational document outlines how your company will be run, detailing the responsibilities of directors, voting procedures, and shareholder rights.
Think of Articles of Associate as the rulebook for your business, ensuring smooth governance and setting the groundwork for decision-making processes. A well-crafted Articles of Association reduces the risk of disputes and provides clarity for all stakeholders.
2. Shareholder Agreements (for Multi-Owner Businesses)
For businesses with multiple owners, a Shareholder Agreement is invaluable. This document outlines the rights, responsibilities, and obligations of each shareholder, fostering alignment and preventing conflicts.
Shareholder Agreement covers critical aspects like voting rights, profit distribution, and procedures for selling shares. Without this agreement, disputes among shareholders could escalate into costly legal battles, undermining the business’s stability.
3. Statutory Registers: Essential Company Information
Under UK law, specifically the Companies Act 2006, companies are required to maintain specific records known as statutory registers.
Statutory registers contain critical information about the company’s structure, management, and ownership. They must be kept at the company’s registered office, a designated Single Alternative Inspection Location (SAIL), or sometimes filed with Companies House. Shareholders are entitled to access these registers upon request.
Here’s an overview of the key statutory registers that every business must keep:
- Shareholder Register keeps track of all individuals or entities that hold shares in the company. It also ensures clarity regarding ownership and changes in shareholding.
- Director Register lists all the company’s directors and must include information submitted to Companies House at the time of their appointment.
- Residential Address Register for Directors: Companies are also required to maintain a confidential record of directors’ home addresses. This information is not made public and is only accessible to authorised bodies like HMRC or law enforcement.
- Secretary Register: For companies that appoint a secretary (optional for private limited companies).This register tracks individuals responsible for ensuring the company’s compliance with legal obligations and filings.
⚠️ Failing to maintain or update statutory registers can lead to legal and financial penalties.
4. PSC Register (People with Significant Control)
Every business must maintain a PSC Register to record individuals who have significant influence or control over the business, often referred to as "beneficial owners."
A Person with Significant Control (PSC) typically meets one or more of the following criteria:
- Holds more than 25% of the company’s shares
- Controls more than 25% of the voting rights
- Has the power to appoint or remove a majority of directors
This register is a legal requirement under the Companies Act 2006 and ensures transparency regarding ownership and control. Using a statutory register template can help you easily include a section for PSC details.
5. Intellectual Property (IP) Agreements: Securing Your Creations
Your intellectual property—whether it’s a trademark, patent, or design—is a valuable asset. An IP Assignment Agreement ensures your business owns any intellectual property (IP) created by contributors, such as co-founders, contractors, or advisors, even if it was done before the business was incorporated.
IP Agreements ensure that ownership and usage rights are clearly defined, protecting your creations from unauthorised use or infringement. Without it, IP created for your business doesn’t automatically belong to the company, risking disputes and making your business less appealing to investors.
To protect your assets and avoid complications, secure an IP Assignment Agreement with everyone who has worked on your product or business, regardless of the significance of their contribution.
6. Consultancy Agreement: For Short-term Roles
A Consultancy Agreement is used for freelancers, consultants, or contractors—anyone working for your business who isn’t an employee (also known as Service Agreements). For someone on your payroll, an Employment Agreement is more appropriate.
Consultancy Agreements are suited for short-term roles that produce tangible deliverables. Unlike an Advisor Agreement, which is for long-term collaboration focused on guidance, this contract is for non-executive individuals or those working externally on specific tasks.
The agreement outlines the consultant’s roles, responsibilities, invoicing, and payment terms. It should also include an IP assignment clause to ensure any work created during the engagement is owned by your business.
⚠️ Avoid imposing employee-like conditions on contractors, such as fixed working hours or mandatory office presence, as this could reclassify them as employees. This would make your business responsible for National Insurance contributions and employee benefits.
7. Employment Contracts: Building a Compliant Workforce
Employees are the heart of any business, and Employment Contracts are a legal requirement in the UK. These agreements outline job roles, responsibilities, and terms of employment, such as salaries, benefits, and termination conditions.
Employment Contracts also protect your business by including clauses on confidentiality and intellectual property, ensuring that sensitive information remains secure.
A clear, comprehensive contract not only fosters trust but also safeguards your business against potential disputes with employees.
⚠️ If your business has five or more employees, you are required to create a Health and Safety Policy too.
8. Supplier and Client Contracts: Ensuring Smooth Operations
Supplier and Client Contracts formalise the terms of your business relationships, minimising risks and misunderstandings. These agreements specify delivery timelines, payment terms, and liability clauses, ensuring that all parties are aligned.
For instance, clearly defined payment schedules protect your cash flow, while termination clauses provide a roadmap for ending agreements amicably.
Investing in robust contracts with suppliers and clients creates a reliable framework for your operations, fostering long-term partnerships.
9. Non-Disclosure Agreements (NDAs): Protecting Confidentiality
NDAs are crucial for safeguarding sensitive information, especially when collaborating with partners, suppliers, or employees.
NDAs specify what information is confidential, the receiving party’s obligations, and the consequences of breaches. By implementing NDAs, you protect your trade secrets, intellectual property, and competitive edge, enabling you to share information with confidence.
10. Data Protection Policies: Compliance with GDPR
Data protection is a non-negotiable aspect of running a business in the UK. Compliance with GDPR requires you to implement policies that address data collection, usage, and security.
For example, your privacy policy should outline how customer data is stored, the rights of individuals to access or delete their information, and your procedures for handling breaches. Robust data protection measures build customer trust and ensure legal compliance.
⚠️ Failure to comply can result in hefty fines, as seen in high-profile cases like the British Airways data breach in 2018 that led to a £20 million penalty.
Other Relevant Documents
Once you have established and registered your business and are ready to begin operations fully, you may also want to consider preparing the following documents.
Terms and Conditions
Terms and conditions are a set of rules and guidelines that outline the rights, responsibilities, and expectations between a business and its users or customers. They help protect both parties by clarifying legal obligations, payment terms, dispute resolution, and other key policies.
💡 For online services, these terms often cover: user accounts, payment terms, acceptable user, privacy and data usage and liability limitations.
Create Invoices
Invoicing in the UK is an essential aspect of running a business, ensuring you get paid for goods or services provided while staying compliant with tax regulations.
An invoice must include key information to be legally compliant and useful for both you and your customers.
This includes:
- Your Business Name
- Address and Contact Details
- The Customer’s Name and Address
- A Unique Invoice Number
- The Invoice Date
- The Payment Due Date
- For the Items Sold or Services Provided: Add a Description, Quantity, Unit Price, and the Total Cost
If you’re VAT-registered, include your VAT registration number, the VAT rate, and the VAT amount charged. Finally, provide the total amount payable and clear instructions on how to make the payment.
⚠️ Keep records: The HMRC requires businesses to retain invoices for at least 6 years.
💡A payment late? Managing overdue payments is essential for maintaining smooth business operations, and a Final Payment Reminder Letter is a crucial tool for this task.
Advisor Agreement: For Mentors, Advisors or Coaches
Having the right support is essential when building a business. An Advisor Agreement helps formalise your relationship with a mentor, advisor, or coach, ensuring clear expectations and protection for both parties.
Advisors bring valuable expertise, offering guidance in areas such as industry insights, networking, or strategic planning. Compensation can vary depending on their contributions, ranging from cash payments to equity, or a combination of both.
An Advisor Agreement defines the advisor’s responsibilities and sets boundaries, such as confidentiality requirements. It also includes terms for their departure or termination and, if applicable, specifies a vesting schedule for equity.
💡 For Example: An advisor might earn the right to purchase 3% of your company’s shares over a set period, such as 0.1% vesting each month, tying their equity to their contributions.
Instantly Create Any Business Document
You can count on Aatos Bind to generate all the essential documents you need when starting a business.
The service is powered by AI, combined with legal input from our lawyers, to tailor each document to your specific situation while ensuring it is legally binding.
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