Legal Requirements for Starting a Small Business

The legal obligations of a business in the UK mean there are a few types of insurance you must have in place before starting a company. Every business must have employers’ liability insurance. This covers the costs to compensate any employees who are injured or become ill through work.

Businesses that use vehicles must legally have commercial motor insurance in place. This includes if only one person drives a car or van for work purposes, such as delivering food or attending client meetings. Professional indemnity insurance isn’t a legal requirement for all businesses, but some professional bodies and regulators require it to be in place.

There are various employment law obligations for businesses that you must comply with if your start-up has one or more staff members. It’s a legal requirement to provide a written employment contract for every employee to ensure fairness and protection for your employees. This is the key information every employee contract should include:

• The employer and employee’s name and address
• Start date of the employee
• Start date when the contract applies
• Continuous services date
• Expected end date of the contract (for a temporary or fixed-term position)
• Job title (or a brief description of duties)
• Hours of work
• Pay
• Holiday entitlement
• Sickness absence and pay
• Notice period
• Collective agreements

Regulations and laws for small businesses around information collection, processing, and storage of personal data are covered by the General Data Protection Regulation (GDPR). Every business must understand and comply with GDPR when storing any kind of personal information. This includes customer, client, and employee data.

All personal data must be stored securely and kept accurate and up to date. Your business has an obligation to tell anyone whose data you have who you are and how you’ll use their information (such as sharing it with other organisations). The individual has a right to see any information you possess about them and correct it, request their data be deleted, and request it’s not used for specific purposes.

As a business, you must also inform the Information Commissioner’s Office (ICO) about how you use personal information and respond to a data protection request (when someone asks to see the information you have about them). Failure to comply with GDPR could lead to a large fine and compensation payout.

All businesses in the UK must legally use licensed waste carriers to remove commercial waste from their premises. The Environmental Protection Act 1990 outlines the responsibilities of businesses when it comes to waste management. Under the act, transferring waste to an unauthorised person is an offence that could be penalised with a fine.

Businesses also have a legal responsibility to keep waste to a minimum and follow the waste hierarchy (reduce, reuse, recycle, and recover waste in that order). You must sort and store commercial waste safely and complete a waste transfer note for every load that leaves your premises.