“Before anything else, preparation is the key to success.” ― Alexander Graham Bell, inventor
Success in business starts with committing to a plan. Business agreements are a written record of that commitment and are meant to help a business to stay the course when outside forces threaten to derail the business plan.
Start-ups often overlook the need to budget for legal services in the early stages of business, but they do so at their own peril. A verbal agreement with a partner, employee, supplier, or customer that ultimately leads to a misunderstanding can quickly cost your business far more than the cost of having a proper business agreement in writing and signed by all the involved parties.
Kickstart Law offers most types of business agreements on a fixed fee basis giving business owners certainty in the cost of their legal services and the ability to budget for this necessary business expense. A smart business plan budgets for professional services, which should include preliminary legal advice to kickstart your business onto the road to success. Kickstart Law offers fixed fees for most types of business agreements. Contact us at email@example.com to get a quote for your business agreements.
Keep reading for our list of 5 essential business agreements that we feel most businesses need.
1. INCORPORATION AGREEMENT
Incorporating your business is the easiest and cheapest insurance policy you can get to protect your personal assets from the risk of being in business. There are also considerable tax advantages to incorporating for some businesses that in the long run will more than offset the upfront costs of incorporating your business.
2. SHAREHOLDER AGREEMENT / PARTNERSHIP AGREEMENT/ OPERATING AGREEMENT
Any business with more than one owner needs a shareholder agreement (if incorporated) or partnership agreement. This agreement not only deals with the management of the business and sharing of profits, but it also sets out a road map for an exit strategy if an owner wants to move on, retire, suffers a disability or dies. Every multiple owner business needs this agreement early on to avoid the risks of litigation over shareholder disputes and unexpected life events.
As for a single member limited liability company, a proper operating agreement can make the difference between the company remaining liable for the business risks and the member being held personally liable for the company liabilities, particularly with respect to creditors.
3. EMPLOYMENT AGREEMENT / INDEPENDENT CONTRACTOR AGREEMENT
If your business hires an employee or an independent contractor, this agreement outlines the obligations of the employee or contractor, the rates of compensation, other terms of hiring, and how the relationship can be ended. Without a written agreement your business faces the risk of having to pay the government a contractor’s unpaid remittances, and dealing with disputes over employee’s severance pay and grounds for dismissal.
4. NON-DISCLOSURE AGREEMENT / CONFIDENTIALITY AGREEMENT
Your business’ confidential information includes your business processes, supplier names, customer lists, pricing schedules, passwords, and all the business documents that you have developed to run your business smoothly. Often in the course of operating your business you will need to disclose this type of information to others, such as employees, contractors, and distributors to name a few. Having an agreement protecting your business’ confidential information helps deter others from improperly using this information to their advantage.