In this article, Shizl sets out to prepare its UK SME community with the information it needs to stay ahead of the demands that 2026 will bring. It outlines incoming legislation, explains why it matters, and highlights the steps that founders should take. It encourages founders to check that employment contracts are compliant, and that data and security policies are up to date and robust, to help make 2026 and the years beyond as smooth as possible.

Companies House verification: action required now

What Companies House verification means for SME founders

All company directors, persons with significant control, and those who file documents on behalf of a company must verify their identity. This process requires key personnel to provide official identity documents and proof of address either to an authorised Corporate Service Provider or directly to Companies House. Although this brings extra administrative work and some cost, it is an important measure intended to reduce fraud, prevent money laundering, and increase transparency across UK organisations.

Enhanced digital filing and compliance requirements in 2026: action required now

Companies House is set to mandate enhanced digital filing and stronger authentication methods, with almost all submissions to be made via improved digital systems.

There will be a greater focus on ensuring that filed information is accurate and current, and Companies House will have more authority to query or reject inaccurate filings. Mandatory verification, tighter deadlines, and greater transparency will result in more detailed public information about a business and its ownership.

Key employment law changes for founders: April 2026 onwards

Founders are expected to be aware of several employment law changes taking effect in 2026. Statutory Sick Pay reforms will remove the lower earnings limit, making SSP available to more low-paid employees, and the three-day waiting period for payment will also be removed. Paid Paternity Leave will be available from day one of employment. Business owners will be required to take reasonable steps to prevent sexual harassment of employees, including harassment by customers or clients, and non-compliance may lead to compensation penalties. There will be restrictions on dismissing employees and rehiring them on worse terms. The time limit for employees to bring unfair dismissal claims will extend from three months to six months.

Failing to meet these responsibilities could lead to financial penalties, including employment tribunal costs, reputational harm, and increased management time spent dealing with employee claims. Founders should be clear about what is required of them.

Global technology issues affecting businesses

In 2026, businesses face increased responsibility for how their technology affects individuals and society. Data protection enforcement is expected to grow, with a continued focus on compliant international data transfers. Regulation for Artificial Intelligence is emerging, requiring greater transparency, accountability, and the development of AI governance frameworks supported by clear ethical guidelines. Cybersecurity requirements will increase, and businesses are likely to face greater liability following data breaches. There will be increased scrutiny of security measures within supply contracts, particularly those involving technology. Sector-specific AI rules and requirements for human oversight of automated decision-making are expected to emerge.

Consumer protection rules will also evolve. Subscription-based businesses must simplify cancellation processes and send reminders about renewals with straightforward opt-out options. Fake reviews for products and services will be banned, including commissioning, hosting, or publishing such content.

Business owners are entering a period of increased compliance demands and potential penalties.

Getting legal documentation in order

From now and over the next six months, founders are expected to focus on reviewing and updating their legal documentation. Understanding legal obligations is essential.
Below is a checklist of documents that should be reviewed and updated:

Corporate documents

• Articles of Association
• Shareholder Agreements
• Director Service Agreements
• Share Option Schemes

Employment documents

• Contracts of Employment
• Employee Handbooks
• Policies on flexible working, harassment prevention, and grievance procedures
• Redundancy and restructuring procedures

Commercial agreements

• Customer Terms and Conditions
• Supplier contracts
• Data Processing Agreements
• Intellectual Property assignments and licences

Compliance documentation

• Data Protection Policies and Privacy Notices
• Cybersecurity Policies and Incident Response Plans
• AI Governance Frameworks
• Anti-Harassment Policies and Training Programmes

Author: shizl: legal documents for UK businesses