7 Legal Documents No Business Can Live Without
Starting and running a business is a big step.
It takes imagination, a vision, and healthy doses of grit and determination. Of course, those are the more intangible aspects of what’s needed to get a business going in today’s uncertain times.
But it also takes legal documentation. That’s the dull, unromantic side of having a business. It also tends to be the most important business requirement.
Don’t worry, though. We’ve got you covered with this handy guide to legal documents for business. So if you’re fretting over the legal documents required for small business, cut it out: we’ve listed some of the most important types of legal documents you’ll need.
1. Business Plan
First up, if you’re looking to start a business, you’ll need financing.
And that means crafting a good business plan. A business plan should include reasons why you need the money, how you’ll be spending it, and the manner in which you’ll earn it back. This will help the bank or other investor decide whether to finance your business.
2. Memorandum of Understanding
This is one of those important legal documents for business that you can’t do without.
A memorandum of understanding (MoU) is preparatory to more binding agreements further down the road. It helps establish a concord between your partners, which is crucial to getting your business up and running.
3. Articles of Association
Finally, the time comes to formally launch your business and get everything running.
Think of the articles of association as something like the US Constitution. Essentially, they lay out the legal principles and objectives of your business, as well as its raison d’être.
4. Employment Contract
This helps spell out the employment relationship and documents what’s expected of employees.
The employment contract establishes the particulars of a job and the obligations of both employee and employer. It’s important to determine the legal requirements for business documents when drafting an employment contract.
And since you’ll need a physical copy for the records, make sure to use the right paper and print with legal documents.
5. Non-Disclosure Agreement (NDA)
Paranoid secrecy is crucial to any successful enterprise. Just ask the Federal Government.
A good NDA or confidentiality agreement helps to (legally) ensure that your bright ideas remain proprietary. It makes clear what’s expected of employees and business partners with regard to your business’ ideas and intellectual property.
6. LLC Operating Agreement
A limited liability company (LLC) is the most likely form that your business will take. An LLC limits personal liability and affords your business certain tax advantages. Forming an LLC is not difficult, and is a critical step to putting your business on a firm footing.
7. Shareholder’s Agreement
This document spells out the agreement between the business’ shareholders and establishes rules for the smooth operation of the business. Basically, it sets out the rights and responsibilities of the shareholders, in an authorized legal framework.
Use the Right Legal Documents for Business
Using the appropriate legal documents for business is absolutely crucial for any well-run venture. They may not be the sexiest part of owning a business, but having the right documents will ensure its success.
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