We want to set up a family business. Will there be fewer formalities to go through than if we didn’t have that close relationship?

6 November 2025 | Business Formations and Structures |

Setting up any sort of business, whether with a sibling or with a new acquaintance, will always be a significant step to take. It will involve risks, responsibilities, rules, and investment. And, that being so, you should get legal advice from a specialist company formation solicitor from the outset. They will help you choose the right business entity (limited company, partnership, for example), and advise you on the steps you should take to ensure that everyone involved in the business understands what is expected of them.

Some people fall into the trap of putting too much trust in the relationship that exists between them and their business partner. It’s understandable; friends and family members know each other well and may be confident that ‘everything will be fine’. But business relationships can turn personal relationships on their head. So it’s vital that you have proper company procedures and ground rules in place, including well-prepared agreements setting out each person’s role, responsibilities, financial commitment, and entitlements.

Our company formation solicitors frequently work with family businesses, and we understand the challenges that these can pose – including when it comes to clients having to address what may seem like overly formal requirements. But all business owners must have these conversations, and we help clients to do this in as straightforward a way as possible.