Every business must adhere to the law and therefore as a business owner, it is imperative to understand all the legal requirements and documents needed.
This will protect you against possible threats by law enforcers who may arrest or fine you for violating the business law.
This article highlights three legal documents which you must have for your business. These documents will save you big deal when it comes to possible arrest for non-compliance.
#1 Company Bylaws
This is one legal document that your business must have and which can save you from multiple legal disputes. Although not every state requires all businesses to have this document, it’s an important legal document that can bring order to your business and help you to orient new people who join your team.
A company bylaw spells out how the business should conduct its activities, procedures, processes, structure, roles for each individual, office and governance level. It narrows down the entire business to simple steps, processes, and procedures.
#2 Operating Agreements and Non-disclosure Agreement
These two agreements are not related and are handled separately.
The operating agreement is a legal document even though it is not a requirement in most states. It outlines the business’ financial and functional roadmaps that guide the organization in making financial and functional decisions. When this agreement is in place, members of an organization are bound by its content and hence there’s order and conflicts are avoided.
The non-disclosure agreement is a legal document that an organization gives to external parties with which the organization is doing business with, and who may have access to the company’s private information in their line of engagement.
So the non-disclosure agreement is a kind of defense to protect your business’ information.
#3 Employment Contract
This is a very powerful document which all businesses must have and which must be well written. There are many cases where employers have been sued for violating the employment contract or for acting in a manner not covered by the employment contract.
As a business owner, you need to ensure you involve a skilled business lawyer or contract attorney to draft a contract or agreement that will safeguard your interests. This will save your business from unwarranted litigations. The details of each employment contract hugely vary from one company to another.
However, there are general issues which must be covered in any employment contract. The rights and obligations of each party must be clearly outlined. These includes:
- The duties and responsibilities of each employee and the expected working hours and days
- The remuneration and allowances if any to be paid to the employee
- Any situation that may compel the employer not to pay the employee must also be clearly stipulated.
An organization can also take the opportunity to outline privacy and confidentiality issues which an employee must adhere to. It’s also through the employment contract that issues of employment termination are also addressed.