Legal Requirements for Setting up an Office

Legal Requirements for Setting up an OfficeBy far the majority of businesses in the UK are made up of sole traders, limited companies and partnerships. If you are setting up an office from scratch, then it is highly likely that your firm will fall into one of these categories. For sole traders, there is often a room in the home which is given over to office activities, a so-called SOHO, and - even if the work of the business is not carried out there, only administration - you can use this space to offset against your tax. However, you may need further advice from a tax consultant or accountant about this. For the purposes of setting up an office in the UK - and the legal considerations you need to make - this article will focus on a small office environment where a few members of staff work together in either a partnership or a limited company. After all, this is how most small to medium enterprises (SMEs) are set up.


For new businesses, UK law requires registration. For SMEs this means deciding on whether to be a limited company or a partnership. The owners of Limited companies are also deemed to be employees of their own business, which has certain advantages, principally surrounding tax and the legal requirements should the business fail. Limited companies must be registered with the proper authority which in the UK is Companies House. People that run the business, usually the owner or owners, are henceforth known as directors. If you opt to operate as a business partnership, you run the office as an individual but any and all of the company's partners share responsibility - and liability - for the business. Profit must be shared between the partners and there are further rules surrounding how you are allowed to name your business. Like soul traders, partners must register themselves for self-assessment under HMRC's rules and provide an annual tax return.

It is worth knowing that a firm's trading address does not need to be the name as their registered office address. Therefore, utilising a registered office service provider, often your accountant, is sometimes of benefit to owners of small businesses, especially those who work from their home address. This is because it means you don't have to place private details on the registers of Companies House. Additionally you can use a virtual office provider or business centre that allows you to use their address as your trading address since not all registered office service providers allow you to use their address as your trading address in addition to your registered address.


Some businesses that are run from offices must have a licence to operate legally within the UK. Most office-based firms don't need a licence, but if you work with food or events, then this is worth checking out. For example, if you run a catering firm from an office, it is likely that you will have to apply for an events licence as well as registering a food business.


New offices usually mean employing new staff. If you only hire people to do your work through temp or contractors' agencies, then this side of things is taken care for you, but you end up paying a premium for it. If you employ people directly within the business, then you are required to offer them a contract.

You will have to pay National Insurance contributions for yourself and for every employee that works for you. The law requires that staff are paid at a rate that is no lower than the national minimum wage. This varies depending on the age of the employee, although in many cases firms need to pay much more in order to recruit staff with the right skills and experience. Each time you pay your staff, you need to deduct income tax from their pay which must be given to HMRC. An accountancy service is useful in this area of payroll administration to help make sure you comply with the law. /p>

Health and Safety

Providing a good working environment in an office is the employer's responsibility. This usually means taking sensible steps to meet things like fire regulations in conjunction with your landlord, unless your business owns its own office. Employees should be able to work at a reasonable temperature, according to the Workplace (Health, Safety and Welfare) Regulations 1992, so heating is usually a must in winter.

It is also good practice to make sure that workers have computer terminals that don't put any strain on their body or eyes. Therefore, screens should be at the correct height and office staff should be supplied with chairs which they can adjust to suit their posture.


Some office managers think that public liability insurance is a legal requirement, but it is not for most office set ups although some office buildings and commercial property owners will require you to have both business and public liability insurance so check with them before signing the rental or lease agreement.


An office worker has the right to 11 hours rest between working days. Simply put, this means that if they finish work at 6pm, then they shouldn't commence work again until 5am the following day at the earliest. Office workers also have the legal right to uninterrupted rest periods during their working day.

Further reading:

Business and Office Guides