Starting a Business

Do I Need a Solicitor to Start a Business?

You do not legally need a solicitor to start a business. You can register a limited company at Companies House for £12 online, and registering as a sole trader with HMRC is free. Many people start businesses without any legal help at all.

However, a solicitor becomes important when you need contracts — whether that is a shareholder agreement between co-founders, terms of business for your customers, or a commercial lease for premises. Getting these wrong can be extremely expensive to fix later. A poorly drafted shareholder agreement, for example, can lead to deadlock or an unfair outcome if one founder wants to leave.

If you are bringing on a business partner or co-founder, getting proper legal advice early is one of the best investments you can make. It forces you both to agree on important questions — who owns what, who puts in what, and what happens if things go wrong.

Choosing Your Business Structure

The three most common business structures in the UK are:

**Sole Trader** — The simplest option. You and your business are the same legal entity. You keep all profits after tax but are personally liable for all business debts. Registration is free with HMRC.

**Limited Company (Ltd)** — A separate legal entity from you. Your personal liability is limited to your investment in the company. You pay Corporation Tax on profits (currently 25% for profits over £250,000, 19% for small profits). More paperwork, but better protection and often more tax-efficient.

**Partnership / LLP** — If you are going into business with others. An LLP gives limited liability protection while a traditional partnership does not. An LLP must file accounts at Companies House.

Most solicitors recommend a limited company if you expect to earn more than £30,000-40,000 per year, because of the liability protection and tax advantages. An accountant can advise on the tax implications of each structure.

Key Legal Documents You Need

Every business should have certain legal documents in place from day one:

**Terms and Conditions** — What your customers agree to when they buy from you. Essential for managing disputes, refunds, and liability.

**Privacy Policy** — Required by UK GDPR if you collect any personal data (including email addresses). Fines for non-compliance can be significant.

**Shareholder Agreement** — If you have co-founders or investors. Covers decision-making, profit sharing, what happens if someone wants to leave, and restrictive covenants.

**Employment Contracts** — Required by law from day one of employment (not just after a probationary period, which is a common misconception).

**Commercial Lease** — If you are renting premises. Always get a solicitor to review a commercial lease before signing — they are typically long-term commitments with significant financial consequences.

How Much Does a Business Solicitor Cost?

Business solicitor fees vary widely depending on what you need:

**Company formation with basic documents**: £500-£1,000 **Shareholder agreement**: £750-£2,000 **Terms and conditions**: £500-£1,500 **Employment contracts**: £300-£800 per contract **Commercial lease review**: £500-£1,500

Many solicitors offer fixed-fee packages for start-ups that bundle common documents together. This is usually more cost-effective than buying each document separately. Some also offer a retainer arrangement where you pay a monthly fee for ongoing access to legal advice.