Does a small business need a lawyer?

April 14, 2021

The way that a small business is nurtured from idea to inception and beyond, means that it can often feel like a family member. And just like a family member, you need to give it all the additional support and protection that you can. That’s where a small business lawyer comes in. 

The right legal advice can help to turn your small business into a big business. A business lawyer can anticipate any problems that could arise as your business grows, providing advice on issues ranging from your business structure to contracts and partnerships.

Legal advice is also vital when you come to selling your business or acquiring other companies. 

Here are just some of the ways a small business lawyer can save you lots of time, money and stress, now and in the future.

Business Structure 

Structures such as being a sole trader, partnerships with a partnership agreement, limited companies and limited liability companies all have advantages and disadvantages. Impartial advice on which is best for you can give you peace of mind. 

You might have envisaged starting off as a sole trader and then incorporating as a company once your profits really start to increase. But, there can be legal and tax implications of starting off as one entity and then switching once you’re established. In some cases, it may be more beneficial to just incorporate straight away.

A lawyer can give you tailored advice to your specific needs and future plans. 

If you have a partnership or a company with more than one shareholder, you should take legal advice on how to protect your interests.

You will need a partnership or shareholders agreement in place to deal with potential scenarios, such as a resignation, sale or unforeseen circumstance.

Using an impartial business lawyer to advise on the documents makes negotiating with other partners easier in future, adding extra weight to your interests.  

Business Contracts

Having legally binding contracts and agreements in place can save you time and money in future as well as understanding your options when another party is in breach of contract, including  remedies and damages. 

Investing in a lawyer to prepare your contracts means you’re less likely to miss things that could cause you serious problems down the line. 

Firstly, you need to understand every single clause in your contract so that you’re clear about your relationships with suppliers, clients and partners. 

Whilst you can find template contracts online, these don’t come with instructions and aren’t specific to your needs. 

Contracts set out the who, what, where and when of your business’ service. If any one of those are missed out, there is the potential for confusion and miscommunication.  

Your contracts also need to include what will happen if anything goes wrong. 

For example, if your client doesn’t pay on time or you experience a legitimate problem which means you can’t fulfil your end of the bargain. 

Small business lawyers with experience in dealing with startups can also help you with NDAs, agreements between partners, shareholders and employment contracts.

Find out more about business to business contracts uk.

Data Protection

GDPR is a set of rules outlining how customers’ personal information can and cannot be used by businesses. 

Your business might collect customers’ names, addresses or email addresses at some point and how you handle this information (and communicate how you handle it) is vital.

The penalty for non compliance is up to 4% of your turnover.  

Asking your lawyer for advice about how to set up legally sound procedures and systems gives you the peace of mind that your business is compliant. 

It is important to note that GDPR is an EU initiative and therefore after Brexit, some specific regulations may change. 

Asking your lawyer to review your data protection procedures, ensures you keep up to date with any changes to the law, even if you have always previously been compliant. 

Selling Your Business

Many founders plan to build their business up and sell it for a profit or they may need to sell it for other reasons.

Whether you sell all or some of your shares in a business to a third party or other partners, a business lawyer can offer you advice to get the best deal. 

This process will include transferring ownership and reviewing the articles of association and shareholders’ agreement. 

Your lawyer can advise on your shares, assets, liabilities, taxes, due diligence and act as a go- between for you and other parties involved in any deal. 

An experienced startup lawyer can also provide guidance on the big question… how should you value your company?

Find out how to sell a limited company in the UK.


A small business lawyer will go beyond legal advice and give you the benefit of their experience in helping startups to develop and grow.  

This can help you make decisions based on independent advice, whether you need EIS SEIS legal advice or advice on acquiring other businesses to help improve your own offering. 

Your lawyer will provide advice on making your business as attractive as possible to lenders and investors, when it is time to upscale and provide you with advice about which route of funding is best for you. 

Your lawyer can also liaise with a potential lender on your behalf to ensure that their terms are fair and that you’re definitely signing up to what you believed has been agreed. 

The term “commercial lawyer” is a broad church, if you’re a startup or entrepreneur then you should seek advice from a specialist startup lawyer. Get started here.

Frequently Asked Questions 

How much does a lawyer cost for a small business? 

The cost will depend on how much time or work is required, but a fee for an initial consultation can be agreed. 

A good business lawyer will discuss costs with you from the outset so that there are no sudden bills landing on your doorstep. 

Get in touch to find out more.

What does a small business lawyer do? 

A large part of their work will be drafting legal documents and ensuring that you understand all of the terms and implications. 

Small business lawyers can work with you right from incorporation of your business to helping with a sale or building with a franchise, and everything in between. 

When should you hire a small business lawyer? 

To make sure you’re on track and compliant from the get go, the earlier you instruct a lawyer the better. If you’re entering into any agreements with other parties or looking for funding, the right legal advice is essential.

The amount of time that you need to call on them for assistance is up to you. 

It also makes sense to start the hunt for a business lawyer early so that you can build a relationship. If you’re ever hit with a serious legal issue, it’s not ideal to start looking from scratch. Having a lawyer that already understands you as a person, how your business operates and that you trust is invaluable.