Business Legal Health Checks: A Straightforward Guide for Busy Owners

Running a business means constant decisions, pressure on cash flow and limited time. A legal health check is a practical way to spot risks early, tighten your contracts and compliance and protect value before problems become costly disputes. Below is a concise framework you can use to assess where you stand and what to do next.

1. Corporate housekeeping and decision-making
Check your company records are complete and up to date. This includes statutory registers, shareholder agreements, director appointments and authorities. Clear documentation reduces friction in transactions and ensures key decisions are validly made. If you plan investment or exit in the next 6–12 months, early alignment on share rights, vesting, leaver provisions and drag/tag will save time and cost.

2. Contracts that reflect how you actually trade
Review your terms of business, major customer and supplier contracts and any bespoke side letters. Ensure they cover scope, pricing, change control, delivery, acceptance, limitation of liability, IP ownership/licensing, data protection, warranties, indemnities, termination and governing law/jurisdiction. Check that operational reality matches the paper. If you sell online or via proposals, confirm the contract is properly formed and your terms are incorporated.

3. Employment, contractors and incentives
Audit employment contracts, handbooks and policies for status, notice, restrictive covenants, confidentiality, IP assignment and bonus/commission clarity. Refresh outdated restrictions and ensure they are tailored by role and geography. For consultants, confirm status, control, substitution and tax risk. Consider simple, well-drafted incentive plans to retain key people while managing dilution.

4. Data, privacy and cybersecurity
Map what personal data you hold, why you hold it and how long you keep it. Ensure you have a lawful basis, appropriate privacy notices, processor terms, international transfer safeguards and a tested incident response plan. Align your data practices with your contracts and your customer promises. Document your decisions so you can demonstrate compliance.

5. Intellectual property and brand protection
Identify what you own, what is licensed in and what is created by staff or contractors. Register core trade marks and, where relevant, designs and patents. Keep an IP register and ensure assignments are signed and stored. Build a light-touch clearance process for new brands and marketing campaigns to reduce infringement risk.

6. Regulated activities and sector compliance
Confirm whether your products, services or marketing trigger sector-specific rules or approvals. Maintain a matrix of applicable regulations, responsible owners and review dates. Where you rely on certifications or third-party assurances, verify scope and renewal obligations.

7. Governance, risk and insurance
Maintain a simple risk register with owners, mitigations and review cadence. Align your insurance cover with contractual commitments, especially indemnities and liability caps. Check notifications and policy conditions so that cover responds when needed.

8. Disputes and credit control
Tighten your order-to-cash process: clear PO requirements, credit checks, invoicing discipline and a polite but firm escalation path. Include step-in and suspension rights in your contracts. For disputes, use an early issues log, preserve evidence and consider mediation to control cost and distraction.

9. ESG, sustainability and supply chain
Document your approach to modern slavery, anti-bribery, diversity and inclusion and environmental impact where material to customers or tenders. Flow down key standards to suppliers and reserve audit rights for high-risk categories.

10. Preparing for investment, debt or exit
If you expect diligence, pre-pack your data room: corporate records, key contracts, IP proof, financials, policies and compliance evidence. Resolve red flags in advance, such as missing assignments, expired contracts or inconsistent terms.

For an informal chat to discuss how we may be able to help you health check your business, please contact a member of our Corporate Team on 0800 542 4245.