23 May Six Agreements Every Startup Company Needs
When starting a new business, most likely your initial thought doesn’t revolve around thinking about the necessary agreements to establish and protect your business, and you likely don’t have a large budget for legal services. However, as a startup company with a limited budget, you probably don’t want to end up spending your scarce resources and time on litigation when your focus should be on building a successful and profitable business. We have affordable flat flee options and packages for legal documents to help startup entrepreneurs which are tailored to fit your business needs. That is why Viera Yague Law Firm Start-Up attorneys are great for entrepreneurs.
Here are some of the agreements that you need to be thinking about when you start your business:
- While not an agreement, you will need to create an entity and follow the State’s requirements for doing so, including preparing and filing your company’s Articles of Incorporation or Articles of Organization, to operate your new startup business. You will need to decide the type of entity that works better with your business model. Consulting an attorney and a CPA for advice would be recommendable at this stage. This is a critical step prior to starting your operations to avoid incurring personal liability when conducting your business.
- If you have partners, whether investors or active managers in your company, you’ll need a Shareholders’ Agreement or Operating Agreement, depending on the type of entity you operate your business with. These agreements clarify the distribution of profits and losses between owners, the terms for voting in major and everyday decisions of the company, designate the managers for the everyday operations of the business, the terms of adding new owners, the procedure for selling the partner’s shares, the reasons for the dissolving the company, etc.
- If you have a physical location for your business, you may have to rent a commercial space or buy a commercial space. If you are renting, the landlord for such location will most likely present you with a commercial lease agreement, which tend to be lengthy and detailed agreements, which you should have an attorney review. If you are buying your commercial location, you will also need a real estate attorney to draft and prepare all documents needed for the purchase and closing. If you are running an online business, or even if you are not, but your business has a website, you will need to have an attorney draft your website terms and conditions and privacy notices for the users for the users of your services or products to be informed of the terms under which they are buying your services or products.
- Whatever the services or products you are selling, you will most likely need a Purchase & Sale Agreement with your Customers. This agreement will set, among other things, the payment terms, return policies, consequences for non-payment, term, termination, the scope of work, etc. It is customary to include a disclaimer or waiver of responsibility clause in this agreements with your customer, even though the wording depends highly on the type of service or product offered.
- Often, whatever it is the type of startup you are building, you will probably find yourself in the situation where you need to buy products or delegate some services to other vendors, especially as your business grows. This will require you to have a Vendor Agreement which will delineate the obligations and responsibilities of you and the vendor. It may also include a confidentiality clause if you must share some confidential information with that vendor and more likely than not a mutual indemnity clause to protect yourself and your business for the other vendors’ negligence.
- As your startup grows, you may find yourself in the position to have to hire another employee or independent contractor to assist you with your workflow. Depending on which option you choose to go with and whether you will have this person on payroll or work independently with minor supervision, using his/her own tools and with a flexible schedule, you will need an Employment Agreement or an Independent Contractor Agreement. This agreement may include a non-compete, a non-solicitation, and a confidentiality clause.
As your business grows and develops, you will need to prepare additional agreements to adapt to your startup business’s ordinary growth. You will probably need to consult with a Business Startup Attorney to figure out what is the right corporate structure for your business, how to keep and maintain your corporate books and employees’ information to comply with all the applicable laws, how to protect your brand, etc. At Viera Yague Law Firm, we can help with your startup business needs from the beginning through the life of the business.