Having all the right kind of contracts in place at the beginning of a business venture manages expectations and prevents conflicts with your business partners, customers, vendors, landlords…you get the idea.
Thus, I present you with a list of the most commonly needed agreements for any business startup:
Shareholder Agreement or Operating Agreement
If you are in a business with more members than just yourself and you form a corporation, you are well advised to enter into a shareholder agreement. The shareholder agreement can restrict free transferability of ownership in the corporation, provide for management and voting provisions and deal in general with the affairs of the business.
If you form a limited liability company, you have to enter into an operating agreement with your fellow business partners. The operating agreement fulfills the same function as a shareholder agreement, just for a limited liability company.
Intellectual Property Assignment Agreement
This agreement can be separate or contained within the shareholder/operating agreement. If your business deals with anything creative, you want to make sure that any owner of the company who creates anything for the company is required to assign ownership therein to the company. You see, people create things (thank god, at least for now) and immediate ownership in those creations usually lies with those people. But that is not where you want it. You want it transferred to the company. In order to transfer ownership in those creative works (i.e. intellectual property in the form of copyrights, trademarks or patents) to the company, you should have all owners (i.e. shareholders in the corporation or members in the limited liability company) be required to immediately transfer those rights to the company.
Again, this can we separate or contained within in the shareholder/operating agreement. Everybody should understand and agree to keep the company’s confidential information secret.
Employment or Consulting/Independent Contractor Agreement
If you foresee to hire employees or independent contractors to work for your company, at a minimum, you want them to also be required to assign all their creative work to the company and keep company information confidential.
Service Agreement/Sales Agreement/License Agreement
These are the agreements with your customers. It helps to have one standard agreement ready to go that sets forth all your terms and conditions with respect to whatever you offer for sale, certain services or products or both.
If you are in the business of selling creative works or intangible things, (for example, software) your main agreement could be in the form of a license agreement. You probably don’t want to “sell” your software completely, because then it would be gone and you couldn’t earn any more money with it. Thus, you just sell a right to use it, install it and so forth.
That’s the legalese on almost everybody’s website. Get it done and be done with it. Review periodically.
**This post is for informational purposes only and does not constitute legal advice**