SQE1 Business Law and Practice (FLK1): what the SRA specification covers and how to revise it

What does SQE1 Business Law and Practice cover?

Business Law and Practice is an FLK1 subject covering business structures, formation, governance, finance, insolvency and business taxation. Revise it by connecting the legal rules to the decisions a business client needs to make. The SRA syllabus includes sole traders, partnerships, limited liability partnerships (LLPs), private companies and unlisted public companies. (SRA, FLK1 specification)

This guide summarises the specification applicable from September 2026 and suggests a revision method. Use the linked specification as your full checklist. (SRA, SQE1 Assessment Specification) For the wider syllabus, see what FLK1 and FLK2 cover. This is study guidance, not legal advice.

Which topics are in the SRA specification?

Business structures and formation

Study how the business forms differ, including legal personality and limited liability. The syllabus also covers establishing companies, partnerships and LLPs: the necessary procedures, constitutional documents, Companies House filings and steps before trading can begin. (SRA, FLK1 specification) Build a comparison sheet organised around the client’s choices: who owns the business, who manages it, who faces liability and what formalities are needed.

Governance, decision-making and partnerships

Company governance includes directors’ and shareholders’ rights, duties and powers; appointing and removing directors; and protecting minority shareholders. Decisions and meetings bring procedural, disclosure and approval requirements, alongside records and statutory filings. Partnership work includes partners’ authority and decision-making under the Partnership Act 1890, together with common partnership-agreement provisions. (SRA, FLK1 specification) For revision, connect each proposed action to the person who can authorise it and the documents needed to complete it.

Finance, security and distributions

The finance syllabus covers borrowing and equity investment, share redemption and buybacks, forms of security, distributing profits and gains, and financial records and accounting requirements. (SRA, FLK1 specification) Organise your notes by transaction: raising money, securing repayment and paying money out. For each, practise identifying the relevant powers, approvals and recording requirements before considering the commercial outcome.

Corporate and personal insolvency

Both business and individual insolvency are included. The specified procedures are company and individual voluntary arrangements, bankruptcy, administration, fixed asset receivership, and voluntary and compulsory liquidation. Asset recovery topics include preferences, transactions at an undervalue, fraudulent and wrongful trading, and setting aside a floating charge. You also need the order in which creditors receive distributions. (SRA, FLK1 specification) Compare procedures by their purpose, entry conditions and consequences; keep asset recovery and creditor priority as distinct parts of your checklist.

Business taxation

Tax is part of Business Law and Practice. The specification identifies these areas (SRA, FLK1 specification):

• Income tax: who is taxed, income categories, reliefs and exemptions, calculations in England and Wales, collection and anti-avoidance. The listed taxpayers are employees, sole traders, partners, shareholders, lenders and debenture holders.
• Capital gains tax: its application to sole traders, partners and shareholders, calculating gains, deductions, reliefs, exemptions, collection and anti-avoidance.
• Corporation tax: income profits and chargeable gains, deductions and reliefs, calculation, payment and collection, company distributions to shareholders and an outline of anti-avoidance legislation.
• VAT: scope and supplies, input and output tax, registration, invoices, returns, payments and records.
• Inheritance tax: business property relief.

Practise identifying the taxpayer and the type of receipt or transaction before calculating. Keep the conditions for a relief beside the calculation method, so that a familiar relief name does not replace checking eligibility.

Where the syllabus stops

The specification excludes the Listing, Prospectus, Disclosure Guidance and Transparency Rules, together with other FCA, London Stock Exchange and market rules or codes. Within finance, share redemption and buybacks are included; other reductions of share capital and financial assistance under the Companies Act 2006 are excluded. (SRA, FLK1 specification) Use those boundaries when choosing revision material.

How is Business Law and Practice assessed?

SQE1 tests application to realistic client situations through single best answer questions, with five options and one correct answer. The assessment is closed book and pitched at a competent newly qualified solicitor. Ethics and Professional Conduct can be tested across all subjects, including business matters. (SRA, SQE1 Assessment Specification)

Business Law and Practice accounts for 14–20% of the FLK1 paper in the SRA blueprint. Questions are classified by their main focus but can require knowledge from other subjects, so the percentage is not a boundary around everything you may need to apply. (SRA, SQE1 Annex 4) From the January 2027 sitting, Business Law and Practice questions appear in FLK1 session 1, mixed in random order with Dispute Resolution and Legal Services; the blueprint proportions do not change. (SRA announcement, 10 September 2026) Practise selecting advice that answers the precise client problem, including its procedural stage, rather than choosing a statement just because it sounds legally familiar.

What traps should your revision address?

Use these distinctions to check your reasoning during practice:

• Entity and individual. Label the company, shareholder, director, partner or lender before applying a rule. Keep ownership, management, liability and tax questions separate.
• Power and procedure. Check authority, approval, disclosure and filing separately. Do not stop once you have identified who wants the transaction to happen.
• Insolvency route and recovery claim. Identify whether the task concerns selecting a procedure, challenging an earlier transaction or distributing available assets.
• Tax method and relief conditions. Write down why a tax or relief applies before doing the arithmetic, and check whose liability the question asks you to calculate.

These are revision prompts, not a prediction of particular questions or a ranking of candidate mistakes. Use your own errors to decide which distinction needs more work.

How should you revise the subject?

Begin with a syllabus checklist and mark areas you can explain, areas you can apply and areas that still need practice. Follow a business through formation, management, funding, distributions and financial difficulty; then revisit the tax consequences at each stage.

Attempt a focused set of single best answer questions without notes. Before reading the explanation, identify the decisive fact and your reason for rejecting the nearest alternative. Afterwards, check the legal source and record the specific error: missing knowledge, the wrong person or entity, a procedural step, or a calculation. Return to that issue in a later session and mix it with related topics. Our guide to revision with spaced repetition develops this routine; the SQE1 study plan places it within your wider preparation.

Check that your materials reflect the law relevant to your sitting. The SRA’s law cut-off is four calendar months before the first assessment in the assessment window. (SRA, SQE1 Assessment Specification)

Where can you start practising?

Try the free SQE1 quick test for mixed-subject practice without an account, with explanations and sources. Treat it as a starting point: a short mixed test cannot establish coverage of the whole Business Law and Practice syllabus. The SQE1 course page shows current subject coverage and question counts so you can compare the available practice with your checklist.

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