I’m often asked about what documents a new business needs to get started. This is an important question, and the answer depends on your company’s unique circumstances.
I’m Neil Fridman. I’m a corporate and startup attorney who has represented hundreds of startups and entrepreneurs. Today, I’m going to tell you about the important documents that your startup business will need.
A business plan
While it is not absolutely required, a business plan can be important for your new company. A business plan outlines what your company does, what market it serves, and where its products are sold. It also should include a forecast for financial performance over time as well as any analyses of how much capital you’ll need in order to execute your strategy and your roadmap.
If you choose an LLC or a corporation
If a limited liability company or LLC is the right entity choice for you, you’ll need to file articles of organization or a certificate of formation with your state’s secretary of state. If you’re looking to incorporate, you’ll file a certificate of incorporation with the secretary of state’s office. You will also need an EIN or an employer identification number, which is like a social security number for businesses.
If you decide to form an LLC, you’ll want to have an operating agreement. This is a document that outlines how key business decisions should be made, how profits and losses should be distributed, as well as the rights and obligations of LLC members along with other important business of the LLC.
If you have incorporated your business, you’ll want the necessary resolutions for appointing officers and directors, as well as the bylaws, which set the rules and regulations for your company’s governance.
More important documents
In addition, if you have co-founders, you may want to consider adopting a shareholder’s agreement. This can help avoid future disputes between co-owners.
If you’re going to be doing business utilizing a different name from your legal company name, you’ll want to file a DBA or “doing business as.”
Hiring employees
If you’re planning on hiring employees, then you’ll want to have an employment agreement and an employee handbook in place. This contract sets the obligations and expectations of the company and the employee in order to minimize future disputes.
Not every hire requires an employment agreement, but the document can be useful if you want to dissuade certain new hires from leaving your company too soon, disclosing confidential information about your business, or going to work for a competitor.
For independent contractors, you’ll want to have an independent contractor agreement in place.
An NDA can be crucial
For any third parties, an NDA or non-disclosure agreement is your first line of defense in protecting confidential information that your business has, such as customer lists, financial records, software, or ideas for a new pricing plan.
This agreement also creates a confidential relationship between your business and any contractors’ employees and other business partners who might get a behind-the-scenes look at your operations.
If you’re leasing space
If you’re leasing space, you’ll want to have a commercial lease agreement in place.
Terms of use and privacy policy
You should also adopt a terms of use and privacy policy for your website and your mobile app. The terms of use explains what type of behaviour is acceptable on your site or app.
It should both inform users about prohibited conduct and prohibit certain types of activity by stating limitations on use, reproduction, modification, distribution, etc., and addressing intellectual property rights such as copyrights.
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