We’re here with practical legal information for your business. Learn about employment law, company law and more.

Setting up a business involves complying with a range of legal requirements. Find out which ones apply to you and your new enterprise.

While poor governance can bring serious legal consequences, the law can also protect business owners and managers and help to prevent conflict.

Whether you want to raise finance, join forces with someone else, buy or sell a business, it pays to be aware of the legal implications.

From pay, hours and time off to discipline, grievance and hiring and firing employees, find out about your legal responsibilities as an employer.

Marketing matters. Marketing drives sales for businesses of all sizes by ensuring that customers think of their brand when they want to buy.

Commercial disputes can prove time-consuming, stressful and expensive, but having robust legal agreements can help to prevent them from occurring.

Whether your business owns or rents premises, your legal liabilities can be substantial. Commercial property law is complex, but you can avoid common pitfalls.

With information and sound advice, living up to your legal responsibilities to safeguard your employees, customers and visitors need not be difficult or costly.

As information technology continues to evolve, legislation must also change. It affects everything from data protection and online selling to internet policies for employees.

Intellectual property (IP) isn't solely relevant to larger businesses or those involved in developing innovative new products: all products have IP.

Knowing how and when you plan to sell or relinquish control of your business can help you to make better decisions and achieve the best possible outcome.

From bereavement, wills, inheritance, separation and divorce to selling a house, personal injury and traffic offences, learn more about your personal legal rights.

Types of venture capital investment

Venture capitalist investors provide financing in return for a proportion of your shares. You may be able to obtain venture capital investment from a business angel or venture capitalist firm. The main types of investment made by venture capitalist (VC) firms and business angels are:

Ordinary shares

Ordinary shares give the venture capital investor ownership of an agreed proportion of the company, and each of the investor’s ordinary shares will carry the same rights as each of your ordinary shares. The return is made up of a combination of dividends (if any) paid out, and the increase in the capital value of the shares.

Ordinary shares are cheap for your company to finance in the short term, and the company only has to pay out dividends if the company has profits available to fund them.

Negotiations over the proportion of ordinary shares that the VC firm or angel receives for an investment can be long and difficult. You will tend to value your company, and thus your shares, more highly than outsiders will.

Preference shares

Preference shares usually entitle the venture capital investor to a fixed dividend each year, such as 10p per £1 preference share (provided there are profits available to pay it from), before any dividend can be paid on the ordinary shares.

If there are no profits to pay the preferential dividend in a particular year, the dividend is usually cumulative, ie arrears are carried forward and paid to the investor in subsequent years when there are profits.

The terms of issue of redeemable shares usually provide that the shares are to be repaid (‘redeemed’) on specified dates, or if the company fails to meet its performance targets. On redemption, the investor usually receives at least the amount he originally paid for his preference shares plus any arrears of the preferential dividend.


Debt consists of overdrafts, loans, hire purchase, leasing and other borrowings. It is usually secured against specific assets (eg your premises or debtors), which will be sold and used to pay off the debt if you fail to keep up with payments of interest or repayment of capital.

Usually you borrow from a bank, rather than from a venture capital firm. But some firms can provide loans, leasing and hire purchase as well as equity finance.

Bringing in outside investors may involve some loss of control over your business. When making a decision about which type of investment could be right for your business, you will need to bear in mind the balance between raising finance and retaining control of your company – particularly with regard to the issuing of ordinary and preference shares. The terms of an investment can be tailored to address this — if in doubt, seek legal advice.

Search the directory of information on the UK Business Angels Association website. Read more about funding your business through private equity on the British Venture Capital Association website.