Key Legal Documents For Starting A Business

When starting a new business, it is critical to be proactive about protecting your personal assets and putting your company in a  position to achieve sustainability both now and in the future. This means giving consideration to legal components and preparing the necessary documentation to protect your company against potential losses and liabilities.

While each business’s needs are unique, below is a list of key documents companies should consider in attempt to protect their assets and reduce risk.

Articles of Organization are used to form a limited liability company (LLC), and Articles of Incorporation are used to form a corporation. Once you chose the most-appropriate legal entity structure for your company, you will need to file the appropriate “Articles” in order to establish your entity in your chosen jurisdiction.

Corporate Resolutions and Minutes

Corporate resolutions are used for things such as appointing officers and directors and making other significant company-level decisions. Minutes provide a record of company activities. These may include board, member and shareholder meetings.

Member or Shareholder Agreement

The member or shareholder agreement is the primary governing document of an LLC or corporation. It outlines the company’s purpose, officers’ and directors’ duties, the terms of financial contributions and distributions, and various other key issues.

Non-Disclosure Agreement

When sharing confidential and proprietary information with potential vendors, investors, or joint venture partners, using a non-disclosure agreement (NDA) can be critical to preventing unauthorized use and protecting your company’s trade secrets against disclosure.

Employment or Independent Contractor Agreement

Whether your company will hire employees, independent contractors or both, it is important to document the relationship appropriately. Employment and independent contractor agreements should each contain a variety of key terms, and they should be customized to fit  the unique needs of your company.

Intellectual Property Registration Applications

Registering your company’s intellectual property (trademarks, copyrights and patents) is a critical step toward building value and protecting your company’s market position. Although certain IP rights are automatic (including limited trademark rights and copyrights), there are several significant benefits to registration. Learn more about intellectual property rights in our blog linked here.

Insurance Policies

For all types of businesses, adequate insurance coverage is one of the best ways to mitigate the risk of facing costly litigation. Company owners should work with brokers early on to find adequate insurance solutions.

It is also recommended for owners to think ahead toward retirement and plan for business succession by including disability insurance that will help keep your business afloat should something unexpected were to happen.

Website Terms of Use and Privacy Policy

Companies’ obligations in the online world are becoming increasingly complex, and website terms of use and privacy policies should be drafted to meet all applicable legal requirements while providing adequate protection from liability. Although frequently overlooked, this type of document can prevent hassle in the future.

Vendor Agreements

Vendors typically have their own “form” contracts, and many services and software licenses are offered on a “take-it-or-leave-it” basis. Before you sign any contract from a third party, you should make sure you understand the key terms and try to negotiate if necessary.

Customer Contracts

Regardless of what your company sells, you will likely want to consider developing a customer contract that outlines customers’ reasonable expectations and provides further insulation from liability. From software licenses to hard goods, and from professional services to gym memberships, all products and services should be sold subject to appropriate terms and conditions.

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