5 Key Legal Documents Every Business Needs
If you run a business, you know that your usage of paper and stamps has increased substantially. A document for this, a file for that…It might become a little frustrating signing contracts and making drafts daily.
We get it – you didn’t open a restaurant to sign supply contracts BUT…every business needs its documents for one very important reason: to protect it.
Legal documents exist to assist your business and that’s why you need to at least have these five essential documents:
1. Confidentiality agreements
Those agreements should be signed with everyone you do business with – from partners to employees, suppliers and outlets that you work with.
Confidentiality agreements might not save you from your competition but they guarantee that businesses working with you will think twice before talking about you in public. They at least know there are consequences.
2. Employment contracts
Any help that you hire, no matter if it’s part time, online or just for a shift is an employment relationship and thus needs to be contracted by law.
Each employee type has quite different rights so having an employee contract makes it clear for you and the employee to know what to expect. In this way you reduce tension, misunderstandings and the probability of a lawsuit is minimal.
3. Partnership agreement
We can never stress enough on the importance of a partnership agreement. If your business structure is a partnership, the first thing you need to do is have an agreement in writing.
Later you can edit it, change it, add or remove clauses and partners but you will all sleep better if you have it from day one.
Partnership agreements have saved many friendships and companies from being sucked into one partner’s personal affairs. Having an agreement means that the partnership will be fair and that personal and professional will stay separate.
4. Business plan
We know that you have it all laid out in your head. Yet, a formal business plan is important, especially if you are building your business as a company structure. Also you will need it for substantial bank loans or if you want to pitch your idea to investors or potential partners.
A business plan is important for financial and legal purposes because it serves as a document that can prove history – when, what and how it was done and this is exactly what you need if your business is ever taken to court.
A business plan also helps you keep track of success and progress allowing you to have a better understanding of what works and what doesn’t.
5. Terms of use and privacy policy
Okay, these are actually two separate documents (but we said they are five and we are keeping our word – 5 points, 6 documents). Anyhow, we put them together because you need to have them both on your website. We don’t assume that you will be going into business in the 21st century without a website. Having those policies online is just so important with hackers and irresponsible users. Terms of use will protect your company against people who use your website for all the wrong reasons (again, hackers!), and a privacy policy will limit the liability you have when it comes to personal information shared on your website (especially if users can see each others’ profile for example).
And of course, make sure that you do sign an agreement every time you shake hands or agree on new delivery times or any other arrangement with clients, suppliers and partners.
Start doing business with this mindset: legal documents are here to protect your business not hinder your operations. If this is not the case with your legal documents, you probably need help drafting new ones.
Get help for drafting contracts, agreements and documents that protect your business and operations.