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Starting a company isn't just opening the doors, cutting a ribbon, and getting to work. There are a lot of legal i's to dot and t's to cross, and, like any legal process, that can create a slew of paperwork. So how do you figure out which documents are essential and which may only slow your startup down?
Here are five standard legal document your startup will need, and why.
1. Articles of Organization
One of the first things you'll need to know is how you want to organize your new business. You have options in choosing a legal structure and there are advantages to each, and if you're choosing to incorporate as an LLC, the articles of organization will act as the structural and legal backbone of your startup.
2. Operating Agreement
Along with articles of organization, you'll want to have an operating agreement that lays out all of the contributions and responsibilities of partners and employees. Most startups being with only a few people on staff, so delineating who is responsible for what up front will make sure you get off on the right foot and keep your business on the right track moving forward.
3. Invention Assignment Agreement
The best part of your startup is the idea. And you and your employees are sure to come up with some more. So how do you protect the ideas and inventions your employees create? An invention assignment agreement provides that all inventions made by an employee/contractor while working for the employer belong to the employer, and are essential, especially in fast-paced tech startups.
4. Non-Disclosure Agreements
Paired with an invention assignment agreement, a valid non-disclosure agreement can make sure that propriety business ideas and inventions stay in-house. Not all NDAs are the same, and not all of them are enforceable, so make sure yours are drafted correctly.
5. Stock Purchase Agreements
Even if you're not planning an IPO, you still need to know how shares in your startup will be allocated. And you might want a stock purchase or shareholder agreement, even if you're a sole founder of the company.
Figuring out which legal documents your startup needs, and properly drafting those documents, is a job for the experts. You can contact an experienced commercial attorney about getting your legal documents in order today.