Before you open your doors on your new business, make sure you’ve got all the details out of the way. Entrepreneurs who are fully focused on success need to look beyond sales inventory, supplies, and workspace issues. Legal documentation for your startup is a vital part of getting ready for your grand opening. These important papers ensure that you are in compliance with all legal regulations, protect your financial interests, and provide information to guide business decisions for many years. Use this checklist to ensure all your legal documents are in order.
Depending on the legal structure of your business, you may need documents that specify your personal liabilities while protecting interests. Two of the most common operating agreements are:
- General partnership. These legal documents for your startup spell out the relationship between business partners and include important details like division of labor, areas of authority, and what happens if the partnership is dissolved.
- LLC operating agreements. An LLC (limited liability corporation) is a special business structure that offers unique protections for personal wealth and tax advantages. The included details are similar to those in a general partnership agreement.
Memorandum of Association
A Memorandum of Association is a brief public statement that lists the company’s name and physical address, along with shareholder names and how much stock each owns.
Articles of Association
Another legal document for you new business that is frequently included with the Memorandum of Association, is the Articles of Association which defines the way companies move their money. Procedures for issuing shares of stock, dividend payments, shareholder voting rights, and the auditing of financial records is covered in this document.
Memorandum of Understanding
A memorandum of understanding makes working with suppliers, vendors, and sales outlets easier. While not considered a legally binding contract, these documents come in handy for reminding other parties of the duties and responsibilities to which they may have agreed in previous conversations. They are also useful for hashing out the details of proposed projects before any final decisions are made.
Terms and Conditions for the Supply of Goods and Services
Like a contract with your customer, the terms and conditions for the supply of goods and services is a startup legal document that provides important information like:
- How payments are processed
- Return policies
- Extra fees
Keep your shareholders happy by laying out all the rules in one simple document. A shareholder’s agreement lets investors know how much of your company they can claim, how company decisions are made, and details on profit sharing. For any business that relies on outside funds, this is a vital document to include in your pre-launch legal preparations.
Life often has its own plans. For businesses with multiple principals, a buy-sell agreement lays out the details of any future sales of business interests. Details like the cost of buying out the other partners, who can inherit the partnership in case of death, and what will happen if one partner suddenly becomes ill and can no longer perform are hammered out in this legal document before they become a problem for your business or startup.
Every business deals with sensitive information. Whether it’s a list of client email addresses or the secret formula for your special sauce, keeping your proprietary information safe is a necessary step to protecting the long-term health of your new enterprise. Have new employees and private contractors that work for you sign non-disclosure or confidentiality agreements to ensure they won’t share any of your important data with anyone else. If a breach occurs, your signed statement gives you the right to pursue the offenders in a court of law.
Non-compete agreements restrict employees from holding employment with companies similar to yours for a specified period of time. Utilizing this legal document for your startup works as an advantage if your company is in a highly technical or competitive field. Barring employees from working with your competitors is another way to safeguard proprietary information.
An employment agreement reduces the potential pain of hiring employees. This document outlines expected duties, payments, benefits, rules on termination, and other vital detail about the employment contract. These agreements are invaluable during employment disputes and salary negotiations.
Terms and Conditions/Cookie and Privacy Policies
In today’s digital world, data is power. Website terms and conditions lay out the rules of using your digital interfaces. Cookie and privacy policies let users know how their data is collected, used, and protected.
Legal Documentation Made Easy with CUE Marketplace
These are just a few of the legal documents your startup business may need. Not sure where to start? Get some help from an online legal services program. Use the CUE Marketplace’s specialized recommendation engine to find the right software to ensure your startup is fully covered from potential legal snares without committing too much of your precious cash flow to lawyer fees.
Use the CUE Marketplace’s specialized recommendation engine to find the right software to ensure your startup is fully covered from potential legal snares without committing too much of your precious cash flow to lawyer fees.