When starting a business, it’s essential to put your obligations in place. Doing so will help protect your company and ensure that everything is in order. But with hundreds of responsibilities at hand, it can be daunting to know where to start.
Industry experts will suggest that you look into the legal aspect of the business. There are a few key documents that you should make sure to have. Each of these papers has a specific purpose and can help your business run more smoothly. So, let’s take a closer look and dive into how you can begin on the right foot.
Business License
A business license is a permit required by law to allow a company to operate. This document permits you to conduct business in your city or state. You need to make sure that you are eligible for one to start. To do so, your company must meet specific requirements. You can find more information about these qualifications online or through your local city or state government.
However, the process of obtaining a business license can be lengthy. Make sure to start the application process early to have enough time to complete it correctly.
Operating Agreement
An operating agreement is a document that outlines the operations of your company. This agreement is between the owners of the business and helps define each individual’s roles and responsibilities. It also spells out how you will share profits and losses among the owners.
If you are a sole proprietor or partner in a partnership, then you don’t need an operating agreement. However, it’s still a good idea to have one in place. It will help prevent any misunderstandings among the owners and serve as a reference point if any disputes arise.
Business Contracts
A business contract is a written agreement between two or more parties. This document outlines the deal’s terms and conditions and helps protect both parties involved. A contract is also legally binding, meaning that it can be enforced by law.
Legal contracts can cover many business aspects, ranging from employment and rental agreements to supply deals and overseas manufacturing partnerships. They play a significant role in your day-to-day operations and should be treated with care. That’s why it’s vital to seek legal advice before signing on the dotted line.
NDA (Non-Disclosure Agreement)
An NDA, or non-disclosure agreement, is a confidential contract between two parties. This document prohibits one party from sharing information that they collect from another individual or company. It’s essential to have an NDA in place if you do business with another company. Before sharing any information, make sure to have this document reviewed by your legal counsel.
Typically, NDAs surround trade secrets or intellectual rights not yet disclosed to the public. They are meant to protect this information and prevent it from being misused. If both parties agree to the terms, you can reveal a trade secret to a third party bound by the terms of the NDA.
Intellectual Rights
Securing your intellectual rights is crucial to protect your business from competitors. Intellectual property refers to any idea, process, or product that is unique and has significant value. Protecting this right is essential and can be done through patents, trademarks, and copyrights.
These three types of intellectual rights provide three different forms of protection. Either way, it’s essential to know how and where to secure these rights and prove that you are the owner.
Property Settlement
When a business faces a split of ownership among its partners, a contract is drawn to determine the buyout price. This document can also include other vital agreements such as pension plans and retirement provisions in some cases.
Both parties should seek legal counsel from property settlement lawyers before finalizing the agreement to avoid any conflicts or misunderstandings. Otherwise, a dispute will need to be settled in court or through an alternative method.
Employee Retirement Agreement (ERA)
An ERA is a legal document that outlines the terms of retirement for employees of a specific business. Like with any other contract, both parties must agree upon it before being made official. An ERA also proves that an employee is entitled to their vested retirement benefits.
Employers and employees can use an ERA to get on the same page about their plans. While no one likes to think about retirement, it’s essential to have these conversations early on to avoid misunderstandings down the road.
Now that you know about the different types of legal documents your business should have, it’s time to get started. Make sure to consult with a legal professional to get started. It will help ensure that everything is in order and protected from any legal disputes.
