Which Key Legal Documents Should Business Owners Remember?

When you are busy operating your business, it may be easy to overlook specific legal issues. In fact, legal documents may feel like a low priority compared with the commercial issues your business faces, such as delivering services or winning new clients. However, there are critical legal documents that your business should prioritise and remember. This article will explore some key legal documents your business should not forget about.  

What Are Some of the Key Legal Documents For Businesses?

Depending on the nature and activities of your business, you will need several legal documents and policies, some of which are mandatory under law. 

1. Privacy Policy

The UK General Data Protection Regulation (‘UK GDPR’) sets out rules around using personal data. This law applies to almost all businesses, as most businesses tend to process some form of personal information. One of the fundamental rules for a business to follow is to provide transparent privacy information to the individuals whose personal data your business uses and controls.

This is mandatory, and the most common way to address this is to provide individuals with a privacy policy document. A privacy policy is a document that discloses various facts about how a business uses personal data. Your privacy policy should include various detailed information, such as:

• the types of personal data you will collect and why;
• how long you hold personal data;
• which third parties you share personal data with;
• whether personal data remains in the UK or if you transfer it to any international countries; and 
• information about how individuals can exercise their data subject rights afforded by the UK GDPR. 

A correctly drafted and UK GDPR-compliant privacy policy is a critical document for compliance. However, a surprising number of businesses overlook the requirement to have one. For example, many websites collecting personal details from users need to include a privacy policy. This is extremely risky given these website owners can face heavy fines, regulatory complaints and several other enforcement powers available to the data protection regulator. As such, your business must not forget the need to have a privacy policy if you process and control personal data about individuals. 

GDPR Essentials Factsheet

This factsheet sets out how your business can become GDPR compliant.

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2. Business Contract

A contract is vital for a trading business, regardless of which stage your business is at. Again, businesses often need to pay more attention to this. For example, a business may feel they do not have the time or resources to prepare a business contract. Or, a business may be relaxed and trust their customers and feel they do not need to impose formal contractual terms. However, you should pay attention to the need for a robust business contract. 

A business contract is a vital commercial agreement, recording the terms on which you do business. As a trading business, this should be a key priority because a contract can:

• protect you if things go wrong by including a limitation of liability provision;
• prevent disputes by setting out clear obligations to avoid mismatched expectations; and
• help you enforce your legal rights since it can serve as evidence in your favour if you ever need to take your customer to court. 

As such, you must remember the requirement to use a robust business contract when you are trading. 

3. Non-Disclosure Agreement

Some businesses also forget about protecting their confidential information. For example, by revealing business ideas to potential investors without asking them to sign any confidentiality documentation. 

A non-disclosure or confidentiality agreement can help protect confidential information. By issuing a well-drafted non-disclosure agreement, you can help ensure that any party to whom you disclose your confidential information keeps it secret. You can stipulate various rules regarding:

• the use of your business confidential information; 
• limits around who can access it; and 
• penalties if the receiving party breaches its terms. 

Without a non-disclosure agreement, you can expose your business to the risk that third parties could misuse its confidential information. For example, a company could share your confidential information with other third parties or publish your trade secrets in the public domain.

How Can Working With A Lawyer Help Me With My Legal Documents?

As a business owner who focuses on trading and growing your business, understanding which legal documents you require from time to time may be challenging. It may be helpful to work with a lawyer on your legal documents. A lawyer can add value in various ways. 

For example, a lawyer can:

• get to know your business and advise you on which legal documents you need;  
• draft legal documents to protect you from risk; and 
• advise you on changes in law and legal requirements relevant to your business, which you must be aware of.

Working with experienced lawyers can help ensure that you do not forget vital legal documents that your business requires. 

Key Takeaways

There are several legal documents that a business needs, depending on its activities and the legal requirements that apply to it. Some critical documents most businesses should not forget about include:

• privacy policies; 
• business contracts; and 
• non-disclosure agreements. 

Failing to have these vital documents in place could expose your business to significant risks. If you require support with preparing these documents, you can work with experienced lawyers to guide you and help you prepare them. 

If you need help preparing key legal documents, our experienced business lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.