Legal Documents Every Small Business Should Have in Place
As a small business owner, paperwork can sometimes feel like the bane of your existence—but in fact, the right paperwork protects your business legally. Aside from the founding documents filed with the state defining your business as a corporation, limited liability company, limited partnership or the like, every small business should have a basic set of documents in place to define relationships with business partners, clients, vendors and employees.
Remarkably, many small companies don’t have all (or sometimes any) of these documents. Let’s run down a quick list of the most essential documents you should have to keep your business functioning smoothly.
Any business that has more than one owner, partner or investor needs some form of shareholder agreement that specifies who owns what, who is responsible for what, and how the various owner/partners will work together. Businesses without this documentation are a breeding ground for sticky lawsuits, particularly if they break up, or someone dies or divorces.
Employment Contracts/Independent Contractor Agreements
Whether you hire employees, independent contractors or a combination of these, you need paperwork that clearly outlines the scope of these relationships—including company expectations (think: employment policy manual), employee/contractor responsibilities, deliverables, terms of payment, etc.
For any third-party individual or company providing supplies or services to your business, you need a vendor agreement that defines those business relationships, including what is being supplied (and by when), what you will pay, terms for settling disputes, and so on.
Employment Policy Manual
In addition to employee contracts which you will have with each member of your staff, you should have an employee manual that details company expectations as well as the rights and responsibilities of your employees in general. This manual becomes the standard frame of reference to resolve disputes and enforce policy.
Reviewed Lease Agreement
If you lease office or work space, you will have a lease agreement with the owner/landlord. These leases can be tricky to navigate and often contain terms that are detrimental to the tenant, so have these documents reviewed by an attorney before signing.
Depending on the nature of your small business, you may need additional legal documents above and beyond the basic list described above.