Legal Considerations for a Food and Beverage Startup

Food and beverage businesses make up a significant portion of the startup industry. There are various considerations that those setting up a business in this industry must think about, especially given the risks of improper food and beverage practices. Such considerations include ensuring compliance with health and safety regulations, registering the business’s premises and obtaining the relevant licenses from the local authority. This article will explain several essential legal implications for prospective founders planning to launch a food and beverage startup. 

1. Registering the Business 

In the early stages of business planning, you will need to decide on the legal structure of your food and beverage startup. The most popular business structures in the UK include:

• sole proprietorship;
• partnerships; 
• limited companies; and 
• limited liability partnerships.

Each structure carries different legal and tax implications and can vary in set-up and operational complexity. It is advisable to seek professional advice if you need help to decide on an appropriate legal structure. The most suitable option depends on the unique circumstances of your business and your plans for its future growth. 

You will also need to register with HMRC to pay income tax. Depending on the structure of your business, you may also need to register the business with Companies House. 

2. Registering the Business’s Premises 

Any business that sells, cooks, stores, handles, prepares, distributes or is involved in food supply must register the business with their local authority. You must register every location that the business operates, including:

• stores, restaurants or cafes; 
• offices; 
• vans; and
• mobile units. 

If your food and beverage startup operates via an online platform or through distance selling, you must also register it with your local authority. You must also seek additional licenses if your startup involves alcoholic beverages. 

3. Record Keeping

If your startup manufactures food or beverages, you must keep up-to-date records showing where your stock has come from, including ingredients and other food products. These records enable traceability. Your records must show your suppliers and those you have supplied with food or ingredients.

4. Adhering to Food Safety Regulations

Businesses operating in the UK food industry must comply with many regulations, such as those set by the Food Standards Agency. These are in place to ensure consumers are safe. You will need to consider aspects such as: 

• hygiene;
• inspections;  
• health and safety guidelines and employee training; 
• allergen management; and 
• risk assessments. 

5. Drafting Contracts

Another vital legal consideration for food and beverage startups is ensuring that you have robust contracts to begin trading. There are different types of contracts you will likely come across, including employment contracts and supplier agreements. You must draft these clearly and comply with relevant laws and regulations. 

6. Protecting Intellectual Property 

In the startup world, brand image is everything. Registering your business’s intellectual property, including trade marks and patents, is the best way to safeguard your brand’s unique identity.

7. Registering to Pay the Soft Drinks Levy 

You must register to pay the soft drinks levy if your business manufactures, packages or imports soft drinks.

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Only particular drinks are liable for the levy. These drinks meet specific criteria, such as containing at least 5 grams of sugar per 100 millilitres. 

8. Complying with Weights and Measures Legislation 

It is essential that labels are accurate on all food and beverages your business sells or otherwise distributes and that they comply with weights and measures legislation. Weights and measures legislation requires packaging to display the weight or volume of products in metric units. 

Key Takeaways 

This article has broken down several essential legal considerations for budding food and drink startup founders. These include the following:

• choosing a business structure and registering the business if necessary;
• registering the business with the relevant local authority; 
• keeping records enable traceability of food products and ingredients; 
• understanding food safety regulations and how your startup business will comply with them; 
• drafting essential contracts such as supplier agreements; 
• safeguarding your brand image by protecting its intellectual property through trade mark and patent registration; 
• registering to pay the soft drinks levy if you manufacture liable soft drinks; and
• complying with weights and measures legislation. 

A lawyer can help you with any of the aspects this article discusses. For example, they can help you draft employment contracts and supplier agreements and protect your intellectual property through trade mark registration. 

If you are considering setting up a startup in the food and beverage industry, LegalVision’s experienced startup 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.