SQE2 business law: what the tasks look like
SQE2 business law tasks are in Business organisations, rules and procedures, which fills the whole of written Day 3. There is no oral task in this area. You need company and partnership law, directors' duties, insolvency basics, finance and money laundering.
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Where business law appears
Written Day 3 is Business organisations, rules and procedures. It has one case and matter analysis, one legal drafting, one legal research and one legal writing task. There is no business interview or advocacy. From 1 September 2026, ethics and professional conduct has its own separate law criterion in SQE2, so spot and deal with the ethics point in every task.
| Skill | Typical business task |
|---|---|
| Case and matter analysis | A company or partnership file with constitution documents, a dispute or a transaction. Advise on risks and steps. |
| Legal research | A question on a director's duty, shareholder rights, a transaction or a statutory rule. |
| Legal writing | A client email about choosing a business form, a director's duty or a share sale. |
| Legal drafting | A board resolution, a shareholder agreement clause, a written resolution or a letter of notice. |
Key law to have ready
- Choosing a vehicle: sole trader, partnership, limited liability partnership and company. Know liability, tax outline, control, publicity and cost.
- Company formation and constitution: Companies Act 2006, articles of association, model articles, shareholder agreements and what each controls.
- Directors' duties: Companies Act 2006, ss 171 to 177: act within powers, promote the success of the company, exercise independent judgment, care, skill and diligence, avoid conflicts, not accept benefits, and declare interest in a proposed transaction.
- Shares and finance: allotment, authority and pre-emption, transfer, dividends, and secured and unsecured borrowing.
- Decisions: board and shareholder decisions, ordinary and special resolutions, written resolutions and filing at Companies House.
- Partnerships: Partnership Act 1890, including partners' liability for firm debts and the default rules when there is no partnership agreement.
- Insolvency: Insolvency Act 1986: wrongful trading, transactions at an undervalue, preferences and the consequences for directors.
- Money laundering: Proceeds of Crime Act 2002 and the Money Laundering Regulations 2017 on client due diligence and reporting.
Build the base with the SQE1 page on business law and practice.
Worked mini example
Two friends, Ayesha and Daniel, want to run a bakery business together and ask whether to form a company. Compare partnership with company for a short client email.
- Liability: in a partnership, partners are personally liable for the firm's debts. In a company, the company is a separate legal person and shareholders risk only their investment, though lenders often ask for personal security.
- Control and rules: a company has articles and a shareholders' agreement. A partnership without an agreement is governed by the Partnership Act 1890 default rules, such as equal shares of profits and an equal say.
- Cost and publicity: a company must register and file accounts and confirmation statements at Companies House. A partnership has fewer filings.
- Recommendation: form a private company limited by shares, with a short shareholders' agreement covering decisions, leaving the business and disputes.
- Ethics: if I act for both founders, and later for the company, I must be clear who my client is and stop acting for both if their interests conflict (Code para 6.2).
The email would give the recommendation in the first two lines, then the reasons, then the steps and the cost.
Common mistakes
- Ignoring that a company is a separate person from its directors and shareholders.
- Confusing the duties of a director with the duties of a shareholder.
- Missing that decisions need the right resolution and the right filing.
- Not asking who the client is: the company or an individual.
- Missing insolvency risk signs, such as unpaid debts and director loans.
- Forgetting due diligence and money laundering checks on a new client.
- Drafting a resolution that does not match the articles.
Business law checklist
- Business form and liability.
- Constitution documents.
- Directors' duties and conflicts.
- Shares, finance, security.
- Resolutions and filings.
- Partnership default rules.
- Insolvency warning signs.
- Money laundering and client due diligence.
- Ethics: client identity, conflict, confidentiality.
Skill pages: client interview, attendance note, advocacy, case and matter analysis, legal research, legal writing and legal drafting.
Practise this now
Minority shareholder excluded and customer divertedPassCase and matter analysis
A private lender whose debenture was never registeredPassLegal drafting
Share transfer clauses for a shareholders' agreementPassLegal drafting
Written resolutions to issue shares to a new investorPassLegal research
Wrongful trading risk for a director of a failing companyPassLegal research
Was the company bound by a lease signed without approval?PassLegal writing
Retired partner facing a supplier's demandPassLegal writing
Director wants to buy the company's yard
Questions
What do SQE2 business law tasks cover?
Business organisations, rules and procedures: company and partnership law, directors' duties, shares, finance, decisions, insolvency basics and money laundering.
When is business law in SQE2?
It fills written Day 3, with one case and matter analysis, legal drafting, legal research and legal writing task.
Is there an oral task in business law?
No. The oral tasks are in Dispute Resolution, Criminal Litigation, Property Practice, and Wills and Probate.
Is money laundering tested in business law?
Yes. It can also be examined in Property Practice from September 2026.
What SQE1 subject helps most?
Business Law and Practice in FLK1, including its taxation content.
Related
- SQE2: what it tests and how to prepare
- SQE2 ethics and professional conduct: how it is tested
- SQE1 Business Law and Practice
- FLK1: subjects, sessions and how to study
- SQE2 legal drafting: how to draft a document that works
Sources: SRA presentation: The SQE2 assessment; SRA: Ethics and professional conduct changes for SQE2 after 1 September 2026; Companies Act 2006; Partnership Act 1890. Checked 10 November 2026.