Any business arrangement comes with an element of risk. As great as it would be to operate solely on trust, things can sometimes go wrong. For that, businesses put legal protections in place that ensure their investment remains safe no matter what happens.
If you’re running a business, there are certain documents you’ll need as you attract new clients and add employees. Here are some of the most common.
Business Formation Contracts
There’s no avoiding the paperwork involved in starting a new business. If you have a partner, you should start with a business partnership agreement, which will outline how income and debt will be split, as well as your individual duties related to running the business.
Two types of agreements that will come in handy in the early stages of running a business are non-disclosure and non-compete agreements. Having this paperwork signed could protect you from a competitor having access to your information and resources.
Your business’s success relies on your ability to bring in money. But you’ll typically find you have to put work in before you can get paid. For that reason, you’ll need documentation to kick off any new working relationship. Draw up a service agreement that you can customize to each project and don’t do any work until a client has signed it.
Although a service agreement can also protect your clients by providing details on what you’ll do, they may also want documentation as to how much they’ll have to pay. Invest in invoicing software that also allows you to provide estimates for the work you’ll perform. If you can conveniently turn those estimates into requests for payment later, you’ll save yourself extra work.
Human Resources Paperwork
When it’s time to hire your first worker, a new era of paperwork begins. You should start with a set of policies that you can refer to for disciplinary purposes. From there, you’ll need to put together a new-hire packet that includes an official employment agreement, as well as tax forms and a job description that you can later use to gauge performance.
If you hire independent contractors, it’s even more important to have signed agreements in place. This paperwork should outline the work to be performed and the payment that will be issued for it. You should also include an indemnity clause that holds your business harmless from any liability incurred as a result of services performed.
The good news is, once you have your documentation in place, you’ll be able to use those agreements throughout your business. Occasionally revisit each document and make sure it accurately represents your business as it grows and evolves over the years.