5 Important Legal Agreements When Starting a Business

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Starting up a business is extremely difficult as you try and foster partnerships, grow your customer base, and increase your public profile. Therefore, it is important to protect yourself legally, so you do not have another thing to worry about. Ensuring that you have completed all the necessary legal agreements will avoid misunderstandings, keep you out of the courtroom, and allow your potential customers to trust you more. Below are 5 legal agreements to consider discussing with a professionally qualified lawyer when starting.

Partnership Agreement

Whether you are former colleagues with the co-owners of your business, or you have decided to start a venture with your friends or an acquaintance, it is important to document a founder’s or partner’s agreement in case there are any disagreements further down the line. It is advisable that this agreement be drafted by a lawyer and should take into consideration  Things that should be documented should include what would happen if one of the founders decides to leave the company, roles and responsibilities, ownership structure and stakes, initial capital contributions, management, decision-making, operating, and approval rights and also any resolutions in the possibility of any disagreements or disputes. Having these and other important aspects outlined in an agreement will allow both parties to be protected, make transparent expectations and save on costs and hassle in the long run.

Non-Disclosure Agreements

As you are starting to grow your business, you will need to rely on the help of others – whether it be new employees, contractors, freelancers or employees of other companies that you are working with.  It may therefore be worth considering getting them to sign a non-disclosure agreement before you give them any vital information about your business so that they cannot share this information with others. This tactic is used by many businesses around the globe – big and small, so many professionals will be familiar with this and will sign it with no questions asked. It will help to protect your business by ensuring confidential information is safeguarded and give you peace of mind when working with others.

Employment Agreement

An employee contract is required anytime you have an employee work for your business. This should ideally be a written contract that clearly outlines expectations of both employee and employer and will be significant in avoiding future uncertainties, problems, and conflict. Employment agreements typically cover wages and other compensation, benefits, duties and responsibilities, working hours, position, confidentiality, non-solicit and non-compete clauses, and termination and notice period. It formalizes a working relationship and creates a solid foundation for both an employer and the employee, giving a sense of stability and security for both parties to work effectively.

Terms of Service and Privacy Policy

If your business is online and has a website, there should be a privacy policy and terms of service that potential customers can view. These documents are even more important if you are dealing with the card details or personal information of clients. A Terms of Service policy sets out the terms by which a visitor can use your business’s website or mobile application. While a privacy policy clearly informs a. user so to how their data will be collected and used. Terms of Service and Privacy Policy provides transparency to users and customers. They give a business the legal credibility, sense of security, and trust that will make customers comfortable to engage with.

Intellectual Property

Finally, it is worth considering the different types of intellectual property protection you may need for your business. There is a various array of a number of intellectual property protection rights, which are suitable for different forms of intellectual property. These include:

Patents: to protect inventions and new processes
Trademarks: To protect your protect logos, slogans, and other words and branding
Copyright: to protects any artistic work, writing, music, film, and computer programs; and Registered designs: to protect any visual design

Understanding what intellectual property your business needs protected and put in place appropriate and necessary protection measures will ensure the ideas of your business and the works relating to it are protected.

We hope this basic introduction to the legal agreements you may need to think about when starting a business will help you on your way to success. If you are looking for legal advice in Melbourne, then please do not hesitate to contact us – we would be happy to help.

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