What is business administration?
Business administration refers to the day-to-day tasks required to manage and operate a business. It's about keeping things running smoothly and ensuring all legal and financial obligations are met. This includes tasks like maintaining accurate business records, managing finances, and filing required documents with government bodies like HMRC. Good administration is the backbone of any well-run, compliant business.
Making business decisions
How you make key business decisions will depend on your business structure. If you’re a sole trader, you make all the decisions yourself. In a partnership, decisions are usually made jointly by the partners, often following rules set out in a Partnership agreement. For limited companies, major decisions are made by directors or shareholders by passing resolutions. Whatever your structure, it’s a good idea to keep a record of significant decisions.
For more information, read Setting up as a sole trader, Running a partnership, and Private limited companies.
Keeping business records
By law, all businesses must keep accurate and detailed records. This is essential for managing your business and working out how much tax you need to pay. Records you must keep include:
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all sales and income
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all business expenses
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Value Added Tax (VAT) records if you’re registered for VAT
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PAYE records if you employ people
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records of your personal income (for sole traders and partners)
You must keep your records for at least five years after the 31 January submission deadline of the relevant tax year. For more information, read Accounting and bookkeeping.
What are a business's legal obligations?
Running a business comes with a range of legal responsibilities. Failing to meet these can lead to fines or other penalties, so it’s vital to stay on top of them.
Filing tax returns
All businesses must tell HMRC about their profits and pay the correct tax. The type of return you file depends on your business structure:
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sole traders and partners report their income on a Self Assessment tax return
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partnerships must also file a separate Partnership Tax Return
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limited companies must file a Company Tax Return and pay corporation tax
You must meet the deadlines for filing your returns and paying your tax bill to avoid penalties.
Following the rules on data protection
If your business processes any personal data (eg customer names and addresses or employee details), you must comply with data protection laws, including the UK General Data Protection Regulation (UK GDPR) and the Data Protection Act 2018. This means handling data securely, being transparent about how you use it, and responding to requests from individuals about their data. It's a good idea to have a clear Privacy policy and Data protection policy in place. For more information, read Data protection.
Health and safety
You have a legal duty to protect the health, safety, and welfare of your staff (if you have any) and anyone else affected by your business, like customers or members of the public. This involves carrying out risk assessments and implementing a Health and safety policy to manage any identified risks. For more information, read Health and safety.
How do you manage your team?
If you employ people, you have legal duties as an employer. You must provide staff with a written statement of particulars (often contained within an Employment contract) and check they have the right to work in the UK before they start. It's also good practice to have key policies (eg disciplinary, grievance, and equal opportunities) set out either in separate policies or in a consolidated Employee handbook. This helps ensure you treat staff fairly and consistently, which can prevent disputes. For more information, read Hiring and follow our Checklist for new employers.
How do you grow a business?
Running your business isn't just about day-to-day compliance; it's also about planning for the future. Strategic growth requires careful management and protection of your business's assets.
Protecting your brand and intellectual property
Your business's intellectual property (IP) covers all its intangible creations, and these are often your most valuable assets. Protecting your IP is vital for building a strong brand and a competitive advantage. It's important to know about the main types of IP protection:
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trade marks, which protect your brand identity, like your business name or logo
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copyright, which automatically protects original creative works like your website content, marketing materials and software code
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design rights, which protect a product's visual appearance. You can get stronger protection by registering your design
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patents, which protect new inventions and give you an exclusive right to your creation
Understanding which IP rights apply to your business and taking steps to protect them is a crucial part of your long-term strategy. For more information, read Intellectual property.
Getting investment
Growth often requires funding. Depending on your business structure, you could seek investment by taking out a business loan, applying for a grant, or bringing in a new partner with capital to invest. For limited companies, an option is to issue new shares to investors. Whatever route you choose, make sure the terms of the investment are clearly documented in a legal agreement. For more information, read Funding your business.
If you need to make new policies for your business, you can make an Employee handbook. Do not hesitate to Ask a lawyer if you have any questions or need help with your business's legal obligations.
