Staying on the Right Side of the Law: A Simple Legal Checklist for Small Businesses
Starting a business in the UK is exciting, but let’s be honest, the legal side can feel confusing, especially if you’re doing it for the first time. The good news? Staying legally compliant doesn’t have to be complicated. A few key steps can help you build a business that’s both legit and ready to grow.
Here are five essential tasks every new business owner should know. Whether you’re a market trader, designer, beauty therapist, or baker, this is your legal foundation.
1. Register with HMRC
If you’re earning money from your business, HMRC needs to know about it. Most Tree Shepherd clients start as sole traders, this is the simplest structure, where you run the business as yourself.
You must register for Self Assessment with HMRC as soon as you start trading. This means you’ll be responsible for submitting a yearly tax return and paying any tax or National Insurance you owe.
🔗 Tip: Use HMRC’s website to register and get your UTR (Unique Taxpayer Reference) number.
2. Keep Good Records
Keeping track of your business income and expenses is not just helpful, it’s the law. You’ll need these records when you do your tax return each year.
That includes:
- Invoices
- Receipts
- Bank statements
- Proof of expenses (like stock, travel, or tools)
You can use a spreadsheet, notebook, or digital tool, whatever works for you. Just make sure it’s organised and up to date.
3. Understand Which Licences or Permits You Need
Depending on your business type, you might need permission to operate. For example:
- Selling food? You may need to register with your local council as a food business.
- Playing music in a shop or salon? You may need a PPL/PRS licence.
- Running a beauty business? You may need health and safety inspections or cosmetic treatment licences.
Not sure what applies to you? A quick call to your local council’s business team can point you in the right direction, or book a mentoring session with us.
4. Get the Right Insurance
Insurance protects you and your clients. In many cases, it’s not legally required—but it’s strongly recommended. Here are some common types:
- Public Liability Insurance – if you work with the public (e.g. markets, clients in a studio)
- Professional Indemnity Insurance – if you give advice or offer specialist services
- Product Liability Insurance – if you sell products
Without insurance, you could be personally responsible for costs if something goes wrong.
5. Check Data and Online Rules
If you collect personal information (like emails or addresses), you must follow data protection laws. You may also need to register with the Information Commissioner’s Office (ICO) and make sure your website or mailing list is GDPR-compliant.
It sounds technical, but it’s mostly about being clear, secure, and respectful of people’s data. We can help walk you through it.
Ready to Get Your Legal Basics Sorted?
We know the legal side can feel overwhelming, but you don’t have to figure it all out alone.
Tree Shepherd’s free 1:1 mentoring sessions are designed for people just like you—new entrepreneurs figuring things out step by step. Whether you’ve got questions about setting up as a sole trader, protecting your ideas, or managing your business admin, we’re here to help.
📲 Book a session today or join one of our informative, hands-on workshops to dig into all the business essentials you actually need to know.
And if you need legal advice in writing, qLegal, the free law clinic at Queen Mary University of London, is now accepting new enquiries. They offer personalised written guidance on:
- Choosing the right legal structure (sole trader, limited company, CIC)
- Meeting Companies House filing requirements
- Preparing for investment
- Protecting your IP (NDAs, trade marks, copyright, patents)
- Complying with UK GDPR (privacy and cookies policies)
Here’s how it works:
You submit your enquiry via their website. If they can help, you’ll be booked for a 45-minute meeting (in person or online) with two law students and a qualified solicitor. Within three weeks, you’ll receive written advice tailored to your business needs.
🎥 Watch a short video about how qLegal works
📩 Check if you’re eligible and submit your enquiry
📚 Or browse free legal resources for start-ups
Let’s get your business set up for success, from the ground up, with support that’s real, free, and made for you.
