Start Strong: Legal Advice for New and Growing Businesses

Posted on 26 Aug 2025

Starting a business, or taking an existing one to the next level, is an exciting chapter.
                                                                                                                                                         
But amongst the energy, ambition, and (perhaps) endless coffee, there’s a quieter truth, some of the most important decisions you make early on aren’t about sales or branding, they’re about getting the legal foundations right.

At AST Hampsons, we work with business owners across England and Wales, from first-time start-ups to established national companies, to make sure those foundations are solid. A little planning now can avoid costly disputes, protect your investment, and set you up for sustainable growth.

1. Choosing the Right Business Structure

Your legal structure will influence tax, liability, and how easy it is to bring in investors.

• Sole trader – simple to set up but you carry full personal liability.
• Partnership – flexible, but needs clear agreements to prevent disagreements.
• Limited company – limits liability and can attract investment, but has more formal reporting requirements.

It’s worth discussing your options with both a solicitor and an accountant so your choice works for today’s needs and tomorrow’s ambitions.

2. Governance: Shareholder & Partnership Agreements

In the early days, it’s tempting to skip formal agreements “we all get along fine, so we don’t need them yet.” Unfortunately, that’s often when problems start.

A shareholder agreement (for companies) or a partnership agreement (for partnerships) sets out how decisions are made, how profits are shared, and what happens if someone leaves or sells their interest. Without one, disputes can quickly escalate and distract from running the business.

Even if funds are tight, aim to put an agreement in place as soon as possible, it’s far easier (and cheaper) to agree terms while everyone is on good terms.

3. Common Legal Mistakes Start-Ups Make

From experience, the most frequent issues include:

• No clear ownership of intellectual property – This can lead to disputes over your brand, designs, or technology.
• Relying on informal or borrowed contracts – “Cut and paste” terms often fail to protect your business or comply with the law.
• Ignoring regulatory compliance – GDPR, health and safety, licensing, and sector-specific rules can’t be left until later.

These pitfalls are avoidable with the right early advice.

4. Premises: Buy, Lease or Neither?

Your premises are more than just a base, they’re a major financial commitment. Buying gives you stability and a potential long-term asset, but requires significant capital. Leasing can preserve cash and offer flexibility, but the lease terms need close review, particularly around rent reviews, repair obligations, and break clauses.

If you’re financing a purchase, your lender may require a mortgage over the property and additional security such as a debenture or personal guarantee. Understanding the implications before you sign is essential.

Are premises even needed? Can you and your staff work remotely or from home? If so, consideration must be given to safeguarding business information as well as considering your employees wellbeing just as if they’re in the office.

5. Financing and Security

Growth often needs funding , whether from banks, private investors, or alternative finance providers. Facility letters, legal charges, debentures, and guarantees all carry obligations. You should be clear on repayment terms, early repayment penalties, and what happens if you hit a temporary cash flow problem.

A solicitor’s review can ensure you understand the detail, and, where possible, negotiate more favourable terms.

6. Contracts that Support Growth

As your business expands, so do the demands on your contracts. Standard terms and conditions should protect your cash flow, limit liability, and reflect the way you actually do business.

Supply, distribution, and agency agreements can open new markets, but they need to be clear on exclusivity, territory, termination rights, and compliance with competition law.

7. Planning for the Future

Whether you’re eyeing investment, franchising, or an eventual sale, it’s never too early to prepare. Investors and buyers will carry out due diligence, and businesses with well-drafted contracts, clear ownership structures, and tidy statutory records stand out as low-risk, high-value opportunities.

The Bottom Line

Enthusiasm and a good product are vital, but a secure legal foundation turns opportunity into lasting success. Taking advice early isn’t just about avoiding problems; it’s about giving your business the best possible chance to grow.

Article by Ben Tatters from AST Hampsons

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