A startup business is like any other business and requires a relatively standard set of legal documents. The legal documents that each startup will need have been briefly summarised below. Each of these documents will need to be tailored to match the nature of your business. If you are unsure of whether or not there are specific legal matters which need to be addressed in the different documents, you should consult with a startup lawyer.
If you’re not operating as a sole trader, then you will need a shareholders agreement if you are setting up a company, or a partnership agreement if you are operating as a partnership. This agreement is essential because it governs the relationship between you and the other founders and investors. The agreement will set out how decisions are made, how a shareholder or partner can remove himself or herself from the business, and most importantly, what each shareholder or partner’s rights and responsibilities are. If you are unsure of what needs to go into this agreement, you should seek assistance from a startup lawyer. A startup lawyer will be able to prepare an agreement which looks after the interests of each shareholder or partner, and also the interest of the business.
Sales/Services Terms and Conditions
Every business provides some sort of product or service. If you are selling products you need a set of sales terms and conditions, and if you are providing services, then you need a set of services terms and conditions. It is important that you include in your terms and conditions what exactly it is that you are providing to avoid disputes between your business and the consumer. Other clauses which should also be a part of your terms and conditions include, but are not limited to, the following:
- payment terms to ensure that you are paid correctly and on time;
- termination provisions to allow you to be able to terminate under certain circumstances;
- intellectual property and/or confidentiality clauses to provide your intellectual property and confidential information as necessary; and
- Email disclaimers and general disclaimers clearly setting out what you are not responsible and will not accept liability for to avoid being held accountable for certain loss or damage that occurs to a damage through use of your products or services.
Setting up your legal foundations is extremely important and it is highly recommended that you have the necessary agreements professionally drafted by a startup lawyer. Having strong legal documents which protect your business interests could be the difference between a startup success and a startup failure.