Every new business owner knows the importance of ensuring their new company complies with and is protected by legal regulations. However, many feel in the dark when it comes to which specific documents they need and how to ensure they have everything in order. Although new business owners may not feel like they are equipped with the legal knowledge they need to get their business off to the right start, there are countless resources that can help.
As a starting point, here are four legal documents every new business owner should have:
- LLC Operating Agreement
Setting up a Limited Liability Company (LLC) is the first legal document every new business owner should have on their radar. Although not legally required to start a business, creating an LLC generates tax, legal and credibility benefits that many business owners choose to take advantage of. Additionally, it provides personal liability protection and a formal business structure.
Tip: If you think setting up an LLC is for you, read our step-by-step guide.
- Employee Contracts
Putting together the perfect team to help you launch and grow your business requires a lot of time, effort and legal considerations. To ensure your relationships with your employees are set up for success, creating an employee contract is essential. Not only does it lay out important points such as the salary, it also ensures they are clear on offerings like benefits, vacations and office perks.
Tip: Consider beefing up your contract with an employee handbook, that way employee expectations are clearly spelled out.
- Terms of Service
If your business has an online website or mobile app, which most businesses today must have in order to find success and remain competitive, a terms of service is an essential legal document. Terms of service spell out exactly how website visitors can use your online site and mobile app. Additionally, this document is crucial for setting up an online payment system.
Tip: Creating a robust privacy policy is an effective complement to terms of service and a must-have document in today’s digital world.
- Business Plan
Although a business plan is not legally required to launch a new company, it is an essential document when seeking financing from investors and when selling your business—two steps many business owners will at some point take. As such, a comprehensive and well-thought out business plan should be on every business owner’s checklist when first getting their company off the ground.
Tip: Not sure how to draft your business plan? Check out our helpful guide.
Legal requirements for starting and operating a company can seem overwhelming and confusing—especially for new business owners. Ensuring you have a comprehensive understanding of what you need will not only get your business off to a successful start, it will also help you avoid roadblocks down the line.
