Skip to main content
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.

Indemnifying directors against legal liabilities and costs

Directors can ask their companies to foot the bill for legal claims made against them. This leaves company directors less vulnerable to the risk of personal bankruptcy, but does that leave the company exposed?

Company directors can be made personally liable, sometimes for unlimited damages, if they are accused of negligence or other wrongdoing. Legal liabilities lurk everywhere - company law, health and safety rules, trading law can all land you in trouble. Having to pay your legal costs as they arise in a heavyweight legal claim against you might mean you face bankruptcy before the court even reaches a decision.

Security offered by the company

Companies can give you security by indemnifying you against your legal liabilities or costs in more of these situations - sometimes even when the claim against you is by the company itself.

What costs can be covered?

For creditor, employee or shareholder claims against you the indemnity agreement can state that the company will pay your legal costs as they arise. If you lose, the company can also agree to pay the damages awarded against you, and any of the other side's costs awarded against you. Alternatively, it can provide that you will get nothing further - and must pay back any money it's already paid towards your legal costs.

If the claim is by the company itself - for breach of any of your duties - it can agree to pay your legal costs as they arise, but you must repay them if you lose.

Of course, your company can't indemnify you for any damages a court orders you to pay to it because of your breach of duty if you lose, or for any of its legal costs that the court says you have to pay.

The company can pay your legal costs if a criminal case is brought against you, as they arise, but you have to repay them if you are found guilty. You can't be indemnified against fines from regulatory authorities, or fines imposed if you are found guilty of a criminal offence.

Put indemnities in writing

So the company has a choice whether and how it will indemnify its directors. If it wants to protect its directors, it should:

  • Make sure the company's articles of association authorise the directors to make the necessary arrangements.
  • Ensure the directors disclose indemnity arrangements in their annual report and accounts. The disclosure requirement applies to each year the indemnity arrangement is in force, not just the year in which it was granted.
  • Retain all indemnity provisions, and make them available for inspection, for a further year after they have expired or terminated.
  • Consider Directors' and Officers' Indemnity insurance to ensure that there is no situation which would not be covered by the insurance policy or the protection given by the company.
  • Consider entering into separate indemnity agreements with the directors.

If in doubt, take legal advice.