Last updated Jul 12, 2024 and written by Laura Azevedo

Essential Contracts for your Business

Once you have incorporated your new company you will be keen to get things running as soon as possible. However, before you hit the ground running it is crucial that you source robust contracts to protect you and your business so that it can grow quickly and safely. In this article we discuss what business contracts you will need for your growing business or startup and some of the essential clauses you should look out for.

Employment agreement and offer letter

The first and most obvious contract for your business is an employment contract. Having incorporated your business, you will likely want to engage staff to help you manage your business needs. Having robust employment contracts is crucial to protect your business and your business’ interests.

The core features of a contract of employment for a new employee include:

  • The employer’s name and address;
  • The employee’s job title and brief job description;
  • Place of work;
  • Date of agreement;
  • Start date and duration;
  • Hours of work (such as whether it is full time of part time) and holiday entitlement;
  • Termination, notice periods and dispute resolution or grievance procedures;
  • Optional benefits, such as sick pay, and;
  • Intellectual property (IP), personal data and non-compete clauses.

It is a legal requirement that companies provide employees with a written contract. Whilst you can find free templates online that might serve this purpose they probably will not offer you the flexibility or protection that your business deserves and needs.

Consultancy and Independent contractor agreement

Another essential type of contract is a consultancy, or contractor, agreement. These types of service agreements might be more appropriate for your business model than taking on employees as they are responsible for their own pension and national insurance contributions. A consultancy agreement is used for a variety of reasons, most commonly to appoint a self-employed consultant to provide services.

A consultancy agreement should contain similar basic information as employment agreements, such as: start date, duration of work, termination and notice. Whilst written agreements like an employment contract are obviously not legal requirements in these circumstances, confidentiality clauses and IP clauses are particularly important when taking on consultants, especially if you have hired them to design something for your business. Under a consultancy agreement, a consultant is obligated to provide the services as prescribed in the contract, invoice the client as per the payment terms in the contract and have professional liability insurance. You might also wish to specify the nature of the services and any deliverables the consultant is expected to provide within your consultancy agreements for clarity.

Confidentiality Agreements

Protecting your business’ confidential information is extremely important but you will need to share information about your business to certain individuals in order for your business to grow. Your employees are an obvious example and in your employment agreements it is prudent to ensure that you have a clause that relates to the handling, processing and sharing of confidential information both to protect your trade secrets but also to ensure that your business does not breach GDPR regulations.

It might also make sense for your business to partner with other businesses in order to scale growth quickly. Typically, in order to see whether two businesses are a good match they will need to share information about their user base and strategies. In these situations it is key that you have access to non-disclosure agreements (NDAs) to ensure that the information you do share remains confidential and, if you decide to officially partner with a partnership agreement, you want to ensure that there are also relevant clauses relating to confidentiality in this new agreement.

Company Policies

Alongside contracts, you also want to ensure that your company has clear policies. For example, you will want to ensure that you provide your employees with a staff handbook to supplement your employment agreement and outline company procedures in the case of illness or grievances, for example.

Alongside this, you will also need to ensure that you have a privacy policy and privacy notice for handling data under UK GDPR regulations and that you have any necessary disclaimers drafted and published.

Finally, depending on the work that your company undertakes, or intends to undertake in the future, you might want to create anti-slavery and human trafficking policies or anti-corruption and bribery policies as these can be a requirement in certain areas of work, such as work with governemnt departments.


Making sure that you have access to these essential contracts when starting your business is one of the simplest ways you can protect your business from the get go. However, downloading templates online, whilst a cheap option, does not ensure that your contracts are tailored to your specific needs or that they offer your business adequate protection. On the flip side, and as all small business owners will know, the cost of law firms can be significantly higher than their available expenditure.

Legislate is a contract creation and management platform that allows you to create lawyer-reviewed legal documents, such as employment contracts and consultancy agreements, in a controlled and safe way. To create a lawyer-approved contract for only £9.95, sign up to Legislate today!

The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.