If you're wondering how to start a business, one of the most important considerations includes the legal requirements to start a business and the business forms needed. The legal requirements to start a business depend on the industry as well as the state.
This article discusses the most important legal documents you may need for your business:
- Business plan
- Operating agreement for an LLC
- Partnership agreement
- Non-disclosure agreement (NDA)
- Employment contract
Importance of Legal Documents
Starting a business in the United States can be done as a doing-business-as (DBA) which requires no specific documentation. You would be in business for yourself. Drawbacks include personal liability in the event that your business is sued and, generally, a much higher tax liability.
Legal documents such as an operating agreement for an LLC, other corporation formation, LLP, or other partnership formation are beneficial for many reasons.
- They form your business at the state level.
- To hold licenses in certain industries and work with the public, you may be required to incorporate according to your state.
- Your personal liability may be reduced if your business is sued.
- You may receive more favorable tax treatment depending on how you structure your business, depending on specific factors.
- Having proof that you incorporated can make it easier to get a business bank account or enter into a loan agreement.
Business Plan
A business plan is a road map for the different areas of your business. There are several important pieces that should be included:
- SWOT analysis
- Information about your market
- Company description
- Competitive analysis
- Management and operations
- Products and services
- Marketing and sales strategies
- Financial projection
Your business plan is not set in stone. As your business changes, your business plan can change.
Operating Agreement LLC
An operating agreement for an LLC explains how an LLC will run. Each state in the US has its own statute as to what is included in the agreement if there is more than one member. There are several important concepts that should be addressed according to the SBA:
- The percentage of ownership of each member
- The voting rights and responsibilities of each member
- The powers and duties of both members and managers
- The distribution of profits and losses
- How and when meetings will be held
- Buyout and buy-sell rules
Create an LLC Operating Agreement
Partnership Agreement
A partnership agreement is a legal document that explains how two or more people will run a business. Putting a partnership agreement in writing is important. If you enter into a partnership with one or more individuals, you need a written partnership agreement y be warae of the legal documents for business partnership you will need.
The most important aspects of what should be included in a partnership agreement are:
- The relationships among partners
- The business of the partnership
- How business is conducted
- How the partnership agreement will be amended
- The length of the partnership
- Why the partners entered into the partnership
- The types of partners in the partnership (ie., is anyone a silent partner or limited partner?)
- The governing law for any disputes
- Contributions required of each partner
- If and when new partners may be admitted.
- How profits and losses will be allocated to each partner
- If and when draws may be taken by each partner
- Dissociation of partners
- Non-competition clause
- Non-disclosure clause
- Non-solicitation clause
- Mediation or arbitration clause
Start a Partnership Agreement Template
Non-Disclosure Agreement
A non-disclosure agreement is an important legal document for businesses because it protects trade secrets.
Most states have specific laws in place that limit the use of an NDA to cover actual trade secrets, be used for a reasonable length of time, and cover a reasonable geographic area. It is important that you seek legal advice before using an NDA to ensure that it is legal in your state.
Create your Non-Disclosure Agreement Template
Employment Contract
An employment contract is a written legal agreement between an employer and an employee explaining the terms and conditions of employment. It includes:
- The duties and responsibilities of the employee
- The pay and whether they are salaried or hourly
- Whether they will qualify for overtime pay. If you do not understand overtime pay laws, you should consult with an attorney
- Non-disclosure agreement
- Non-solicitation agreement
- Non-compete-agreement
- The term length of the contract
- Whether the contract is renewable
- Arbitration or mediation clause
- How or why the contract may be terminated by either party
- Sick leave and vacation policy
Get an Employment Contract Templates
Get the Legal Documents You Need
There are many legal documents that businesses need for success. LawDistrict makes it easier for businesses to continue to operate during the pandemic and beyond. To learn more about how LawDistrict can help and get started using our Business forms and templates.
Table of Contents:
Table of Contents:
If you're wondering how to start a business, one of the most important considerations includes the legal requirements to start a business and the business forms needed. The legal requirements to start a business depend on the industry as well as the state.
This article discusses the most important legal documents you may need for your business:
- Business plan
- Operating agreement for an LLC
- Partnership agreement
- Non-disclosure agreement (NDA)
- Employment contract
Importance of Legal Documents
Starting a business in the United States can be done as a doing-business-as (DBA) which requires no specific documentation. You would be in business for yourself. Drawbacks include personal liability in the event that your business is sued and, generally, a much higher tax liability.
Legal documents such as an operating agreement for an LLC, other corporation formation, LLP, or other partnership formation are beneficial for many reasons.
- They form your business at the state level.
- To hold licenses in certain industries and work with the public, you may be required to incorporate according to your state.
- Your personal liability may be reduced if your business is sued.
- You may receive more favorable tax treatment depending on how you structure your business, depending on specific factors.
- Having proof that you incorporated can make it easier to get a business bank account or enter into a loan agreement.
Business Plan
A business plan is a road map for the different areas of your business. There are several important pieces that should be included:
- SWOT analysis
- Information about your market
- Company description
- Competitive analysis
- Management and operations
- Products and services
- Marketing and sales strategies
- Financial projection
Your business plan is not set in stone. As your business changes, your business plan can change.
Operating Agreement LLC
An operating agreement for an LLC explains how an LLC will run. Each state in the US has its own statute as to what is included in the agreement if there is more than one member. There are several important concepts that should be addressed according to the SBA:
- The percentage of ownership of each member
- The voting rights and responsibilities of each member
- The powers and duties of both members and managers
- The distribution of profits and losses
- How and when meetings will be held
- Buyout and buy-sell rules
Create an LLC Operating Agreement
Partnership Agreement
A partnership agreement is a legal document that explains how two or more people will run a business. Putting a partnership agreement in writing is important. If you enter into a partnership with one or more individuals, you need a written partnership agreement y be warae of the legal documents for business partnership you will need.
The most important aspects of what should be included in a partnership agreement are:
- The relationships among partners
- The business of the partnership
- How business is conducted
- How the partnership agreement will be amended
- The length of the partnership
- Why the partners entered into the partnership
- The types of partners in the partnership (ie., is anyone a silent partner or limited partner?)
- The governing law for any disputes
- Contributions required of each partner
- If and when new partners may be admitted.
- How profits and losses will be allocated to each partner
- If and when draws may be taken by each partner
- Dissociation of partners
- Non-competition clause
- Non-disclosure clause
- Non-solicitation clause
- Mediation or arbitration clause
Start a Partnership Agreement Template
Non-Disclosure Agreement
A non-disclosure agreement is an important legal document for businesses because it protects trade secrets.
Most states have specific laws in place that limit the use of an NDA to cover actual trade secrets, be used for a reasonable length of time, and cover a reasonable geographic area. It is important that you seek legal advice before using an NDA to ensure that it is legal in your state.
Create your Non-Disclosure Agreement Template
Employment Contract
An employment contract is a written legal agreement between an employer and an employee explaining the terms and conditions of employment. It includes:
- The duties and responsibilities of the employee
- The pay and whether they are salaried or hourly
- Whether they will qualify for overtime pay. If you do not understand overtime pay laws, you should consult with an attorney
- Non-disclosure agreement
- Non-solicitation agreement
- Non-compete-agreement
- The term length of the contract
- Whether the contract is renewable
- Arbitration or mediation clause
- How or why the contract may be terminated by either party
- Sick leave and vacation policy
Get an Employment Contract Templates
Get the Legal Documents You Need
There are many legal documents that businesses need for success. LawDistrict makes it easier for businesses to continue to operate during the pandemic and beyond. To learn more about how LawDistrict can help and get started using our Business forms and templates.
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