Last Updated on Dec 23, 2019 by James W
Documents are the last thing that any business owner wants to deal with when starting a new business. You just want to focus on making money. But if you don’t have the right paperwork, you’ll open yourself up to conflicts, disagreements, and lawsuits. This can get your business into serious trouble if you don’t have any documents on hand.
The moment that you have a document created, you should get it signed as soon as possible. It’s better to get these documents handled before your business launch. Since you’ll have to get these important documents notarized, here’s a great resource: https://www.superiornotaryservices.com/find-a-notary-near-you/
Sites like these offer notaries that come to you. You’ll need the following six documents to protect yourself and your business.
Owner’s Agreement
An owner’s agreement can help reduce conflict and miscommunication problems among you and your business partners. As you may know, working with a business partner isn’t always easy. This establishes trust, keeps you working toward the same goals, and increasing the possibility to raise venture capital. The owner’s agreement should include three sections: Equity Ownership and Vesting, Intellectual Property (IP) Assignment, and Roles and Responsibilities.
The Equity Ownership and Vesting section addresses how you’ll split equity among you and your busienss partners. The Intellectual Property (IP) Assignment determines that whichever IP you are developing is owned by your business rather than the owners themselves. Lastley, the Roles and Responsibilities section establishes clear boundaries for decision making and reporting the structure of your business.
Independent Contractor Agreement
When your business is just starting out, hiring independent contractors can be a cost-effective solution. You’ll need an independent contractor agreement that clearly defines your relationship. You have to make it clear that you hired these workers as independent contractors, not W-2 employees. And, they need to understand that they’re responsible for their own taxes. If you don’t fill out this agreement, the federal government will force you to pay payroll taxes or workers’ compensation depending on the situation.
You don’t want to get on the IRS’ bad side. If you want to avoid the wrath of the IRS, then you’ll need to hire an accountant to help you. Software can’t do all of the work for you. A professional accountant can prevent your business from being audited.
To find a certified personal accountant, you can ask family and friends for recommendations. Or, you can find one through an online directory. Make sure that the accountant you hire has years of experience and is up to date on the federal and state tax laws. They should be confident and competent enough to file your business’s taxes from the previous year.
Standard Vendor Agreement
The standard vendor agreement ensures that you meet customer demands every time you make a sale. It should include the terms and conditions that your vendors and suppliers will have to meet. They will be responsible for providing the merchandise to your company. In your agreement, you should include terms such as exclusivity, indemnification, and limitations of liability so it makes legal business sense.
Non-Disclosure Agreement
Before you take on any business partners, employees, independent contractors, investors, they should sign a non-disclosure agreement. Without this document, your personal information such as your customer lists, financial records, and pricing information could be made public. In the non-disclosure agreement, you should clearly state that your business owns the information and how that information should be handled.
Corporate Bylaws
Some states require that businesses create their own company bylaws. Even if your state doesn’t require one, it’s still good to have on hand. Company bylaws can help define the structure of your business and how it follows government laws. This should give you an idea of how to determine the rights of shareholders, handle business disputes, and select the right leaders.
Meeting Minutes
One last document you’ll need is meeting minutes. For all of your meetings, you need to document everything that was said or agreed upon. Meeting minutes is a record that’s used to handle business disputes that may have occurred during a meeting. According to the law, if the action was never documented, then it never happened.
While it can be difficult to create all of these documents, they are imperative to the success of your business. You might assume that you’ll get along with your business partners, vendors, and workers, but issues can arise. Protecting yourself early on can make it easier to handle such situations.
