When running a business, there are a range of commonly used documents that you may need for a variety of purposes. Having written agreements, terms and conditions and other documents available to you, you will be able to set out how your business operates, what your employees can expect from you, how you contract with purchasers and how you can protect yourself from liabilities. Examples of such documents include, but are not limited to:
- Terms and Conditions
- Privacy Policies
- Employment Agreements
- Shareholder’s Agreements
- Partnership Agreements
However, in the course of running a business, many business owners may prepare their documents based on documents used by other businesses. This is a tempting option to business owners who are often pressed for time and are attempting to keep the costs of managing their own legal affairs down. While it may seem simple easy to base your documents on other documents that you have seen, this could cause serious problems to you and your business for a variety of reasons.
Tailored to your business
Written documents are very useful because they can act as a point of reference if any disputes arise between you and another party involved with your business. Keeping this in mind, it is very important to prepare original documents that are tailored specifically to your business needs. For example, you may have drafted a shareholder’s agreement based on a simple founder agreement that is being used by another company. If your company is bought-out by another competitor and your shareholders begin to sell their shares and leave the company you may not have any provisions in your shareholder’s agreement to deal with this situation. This would be because a simple founder agreement would not generally make allowances for such complex matters. For this simple reason it is vital that you draft documents that respond to the specific needs of your business so that if any disputes, conflicts of interests or any other disruption to your business operation arise, you will have a comperehensible legal document to deal with the situation.
In basing your legal documents on the documents of another business, you will be at serious risk of breaching copyright laws. Under the Copyright Act 1968, you cannot use the intellectual property of another person without their consent. In doing so, you will have breached the other person’s copyright for which you may become legally liable. This is quite a serious issue and it is important for business owners to ensure that all the documents they use are original and do not infringe any copyright laws.
While the documents used by many businesses may look professional and legally sound, there is a chance that the information in these documents are outdated or simply incorrect. Using incorrect information in your legal documents could cause enormous problems to those relying on this information. For example, you may have drafted an employment agreement for a full-time employee based on an agreement put together by another company. The other company’s employment agreement may not include a clause stating that all full-time employees are entitled to long service leave after working with the company for more than 12 months. Because of this, you may refuse your full-time employees long service leave and, without your knowledge, be breaching Australian employment law. Understanding the law may be difficult so it is a good idea to contact a legal professional for assistance.
To operate a successful business, it is important for your documents to meet legal requirements and be tailored to the needs of your business. For this reason, it is a great idea to invest a little time to prepare original documents that you may rely on in the future as a point of reference in case of doubt or any disputes. If you want to build any of the documents mentioned in this article, please see the following page: https://legalvision.com.au/legal-documents/
To speak with a business solicitor, call LegalVision on 1300 544 755.