Takeaways
- Company legal documents are crucial for starting a business
- Proper documentation may limit personal liability and offer some tax benefits
- Business plans, operating agreements, and NDAs are a few key documents.
- An employment contract is what outlines the terms between employers and employees
If you're wondering how to start a business, one of the most important considerations is 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 paperwork to start a business:
- Business plan
- Operating agreement for an LLC
- Partnership agreement
- Non-disclosure agreement (NDA)
- Employment contract
- Articles of organization
- Articles of incorporation
- Shareholders’ agreement
- Independent contractor agreement
Quote block: Remember:
You are not required to incorporate your business in the same state that you live in. You can incorporate it in any US state you want. You are encouraged to do your research and choose a state that you believe is the most business-friendly.
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 the 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
Understanding that the essential LLC legal documents are needed is crucial for proper business formation. 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.
If you enter into a partnership with one or more individuals, you need a written partnership agreement and be aware of the legal documents for a 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 (silent partners or limited partners)
- 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 Template
Articles of organization
Articles of organization are legal documents that formally create a limited liability company (LLC). You typically file them with the state in which you're forming the LLC.
The state may not recognize your business if you do not file them correctly.
This document typically includes important information about the business, such as:
- The LLC's legal name
- The business address
- The name and address of the registered agent
- The purpose of the business
- Whether the LLC is member-managed or manager-managed
- The names of the LLC members or organizers
- The effective date of formation
Start your Articles of Organization
Articles of incorporation
Articles of incorporation are used to legally form a corporation. You file them with the state. This officially creates the company as a separate legal entity from its owners.
The information you need to include is different in each state. It often includes:
- The corporation's legal name
- The business address
- The name and address of the registered agent
- The purpose of the corporation
- The number and type of shares the corporation can issue
- The names of the incorporators
- The corporation's duration, if it is not intended to exist indefinitely
Create Your Articles of Incorporation
Shareholders’ agreement
A shareholders’ agreement is a legal document that explains the rights and responsibilities of shareholders in a company.
This agreement can help prevent disputes by setting out:
- Rules for ownership
- Decision-making
- What happens if a shareholder wants to leave the company
A shareholders’ agreement should usually include:
- The rights and obligations of each shareholder
- How shares may be transferred or sold
- Voting rights and decision-making rules
- Dispute resolution procedures
- Restrictions on selling shares to outside parties
- What happens if a shareholder dies, resigns, or is removed
- The distribution of profits and dividends
- Confidentiality or non-compete clauses
Build a Shareholders’ Agreement
Independent contractor agreement
An independent contractor agreement is a written contract between a business and a self-employed worker or service provider.
It explains:
- The work to be performed
- The terms of the business relationship
Independent contractors are not usually treated the same as employees. The contract should make sure that both parties understand the relationship fully.
An independent contractor agreement often includes:
- The services the contractor will provide
- The payment amount and schedule
- The deadline or project timeline
- Who owns the completed work or intellectual property
- Confidentiality requirements
- Whether expenses will be reimbursed
- How the agreement can be ended
- Whether the contractor can work with other clients
- The contractor’s responsibility for taxes and insurance
Create an Independent Contractor Agreement
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:
Takeaways
- Company legal documents are crucial for starting a business
- Proper documentation may limit personal liability and offer some tax benefits
- Business plans, operating agreements, and NDAs are a few key documents.
- An employment contract is what outlines the terms between employers and employees
If you're wondering how to start a business, one of the most important considerations is 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 paperwork to start a business:
- Business plan
- Operating agreement for an LLC
- Partnership agreement
- Non-disclosure agreement (NDA)
- Employment contract
- Articles of organization
- Articles of incorporation
- Shareholders’ agreement
- Independent contractor agreement
Quote block: Remember:
You are not required to incorporate your business in the same state that you live in. You can incorporate it in any US state you want. You are encouraged to do your research and choose a state that you believe is the most business-friendly.
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 the 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
Understanding that the essential LLC legal documents are needed is crucial for proper business formation. 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.
If you enter into a partnership with one or more individuals, you need a written partnership agreement and be aware of the legal documents for a 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 (silent partners or limited partners)
- 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 Template
Articles of organization
Articles of organization are legal documents that formally create a limited liability company (LLC). You typically file them with the state in which you're forming the LLC.
The state may not recognize your business if you do not file them correctly.
This document typically includes important information about the business, such as:
- The LLC's legal name
- The business address
- The name and address of the registered agent
- The purpose of the business
- Whether the LLC is member-managed or manager-managed
- The names of the LLC members or organizers
- The effective date of formation
Start your Articles of Organization
Articles of incorporation
Articles of incorporation are used to legally form a corporation. You file them with the state. This officially creates the company as a separate legal entity from its owners.
The information you need to include is different in each state. It often includes:
- The corporation's legal name
- The business address
- The name and address of the registered agent
- The purpose of the corporation
- The number and type of shares the corporation can issue
- The names of the incorporators
- The corporation's duration, if it is not intended to exist indefinitely
Create Your Articles of Incorporation
Shareholders’ agreement
A shareholders’ agreement is a legal document that explains the rights and responsibilities of shareholders in a company.
This agreement can help prevent disputes by setting out:
- Rules for ownership
- Decision-making
- What happens if a shareholder wants to leave the company
A shareholders’ agreement should usually include:
- The rights and obligations of each shareholder
- How shares may be transferred or sold
- Voting rights and decision-making rules
- Dispute resolution procedures
- Restrictions on selling shares to outside parties
- What happens if a shareholder dies, resigns, or is removed
- The distribution of profits and dividends
- Confidentiality or non-compete clauses
Build a Shareholders’ Agreement
Independent contractor agreement
An independent contractor agreement is a written contract between a business and a self-employed worker or service provider.
It explains:
- The work to be performed
- The terms of the business relationship
Independent contractors are not usually treated the same as employees. The contract should make sure that both parties understand the relationship fully.
An independent contractor agreement often includes:
- The services the contractor will provide
- The payment amount and schedule
- The deadline or project timeline
- Who owns the completed work or intellectual property
- Confidentiality requirements
- Whether expenses will be reimbursed
- How the agreement can be ended
- Whether the contractor can work with other clients
- The contractor’s responsibility for taxes and insurance
Create an Independent Contractor Agreement
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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