Top 5 Most Important Legal Documents To Take Care Of Before Launching Your Startup
Starting up a company or business could be tiresome if you do not have everything set-up ready. It is very important to have an advisor, as well as have every piece of legal document for a startup/entrepreneurship handy and ready. Each type of business, there are specific types of legal documentations that one should comply.
There have been some entrepreneurs who’ve been successful in launching their very own start-up. Most of them have studied and spent most of their years just to study the art of business. With regards to legalities, there are some small businesses legal documentation services providers that you can find over the web nowadays.
Well, before you start hunting for legal documentation services, there are the top 5 most important documents to take care of before launching your very own startup company or business.
1. Intellectual Property (IP) Assignment Agreement
This is one of the most vital documents that is mostly overlooked by a lot of entrepreneurs who want to start their own business or company. An Intellectual Property Assignment Agreement consists of all the rights of ownership that define the company. This could be best done by an expert in this field i.e. an IP Lawyer. This first document should consist the actual assignment, the timing of assignment, moral rights as well as the so-called third party confidentiality.
Each of the clauses included herein should be properly meditated. You may seek a second opinion from some legal advisors. Having to look for an actual IP Lawyer is also very important for properly drafting this document. They are the best people in authority as this document defines your business, hence, could be a very vulnerable point if not handled and drafted properly.
The contents of this document should be reviewed well by an IP Lawyer as this also depends largely on the success of a start-up company. The IP portfolio is the main aspect that attracts more clients and will help your company grow in time. There are two main types of Intellectual Property. The first one basically is the basis of the company’s formation which is called technology assignment agreement and the second one refers to any new ideas and innovation created by the company’s employee after the company’s foundation and is referred to as the invention assignment agreement.
It should be noted that by any means, this document should be protected to avoid being hijacked and pirated by a lot of social engineers who may see you as a good target, since you are just starting up.
You simply would not want to mess up on the launch of your first ever startup. Planning ahead of time is very necessary to ensure success. Hence, one of the top 5 most important documents to consider in this regard, is the book of law. By-Laws can be found in any company, whether it is big or small. It contains certain norms and rules that each member of the company should follow religiously.
A good by-laws document should include internal laws to be implemented within the company, standard operating procedures when settling disputes, as well each member’s jurisdiction, so that they are able to determine the rights and powers of each individual shareholder, as well as the future business partners.
Code of conducts should be properly discussed and defined in each page of the by-laws, as well as the corresponding penalties included therein whenever a member of the company is deemed guilty of violating such laws. As one of the governing principles of a company, it is very important to find a good lawyer as well as a trusted legal documentation service provider.
3. Shareholder Agreement
While documents such as the by-laws are crucial before launching your very own startup, it is also equally necessary to have laws that govern the shareholders themselves. This is extensively applicable for corporations since most modern startups are of that type. Trust is already basic when building up a relationship between your business partners, but to have a written document that every member of member of the higher rank can agree on will help cement that trust.
This type of document should always be in line with the current legal standard offered at the time it is made. Although it is considered to be the principle that should govern shareholders, it is important to have the contents of this document updated from time to time, whenever there is a change in the laws governing such agreement.
A good agreement of such kind should include the rights to transfer shares, the right of first refusal, the shareholder’s right and power to manage the startup as well as the right for redemption whenever a shareholder dies or becomes disabled. All of the governing principles included herein should be properly meditated to avoid any conflict of interest among governing bodies.
4. Employee Contracts and Offer Letters
Once you have established the nature of the rights and rules, as well as how your company should operate when launching your startup, it is now time to draft the actual employee contracts and offer letters, where you should include all of the most important parts of every contract letter to date. For small time businesses as well as corporate owners, you may want to get help from small business legal documentation services as these private sectors are able to provide best solutions for these types of needs.
Both the employee contract as well as the offer letter should contain every piece of information that is relevant to the employee’s position. This should include the terms and nature of employment, compensation structure, jurisdiction and assignment, required commitments and the company’s policy for employment.
5. Non-Disclosure Agreement
This is one of the most common yet vital legal documents that you should have ready before launching your startup. This governs the rights of your company or business to keep whatever conversation or agreement you have between the company and any outside party to remain within the four walls of your building. This specific legal document best safeguards ideas and intellectual properties.
Entrepreneurs should always seek the advice of legal experts as well as legal documentation service providers for a standard form of a non-disclosure agreement. Always bear in mind, that this document is one of the key methods to avoid fraud and piracy when discussing and building possible relationship among prospects as well as employees.
A nondisclosure agreement document should contain the definition and explanation of the following points.
- The Company’s rights and ownership of the information
- How Confidential information is defined as per the by-laws of the company
- How Confidential information affect the whole enterprise
- How this information should be viewed and handled by both parties
- The serdifferent instance wherein the confidential information could be disclosed
A well-established set of these legal documents would define your standing in the competition you are about to enter. Always keep this in mind before even launching any startup in the future. Legalities, although being an expense, can also save and secure any startup in the future. Whether you are launching a small or big-time startup, the notion of running into problems should not really matter as long as you have these top 5 documents secured before your launch.
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