Whether you are in the start-up phase or your emerging business is starting to expand, it is wise to formalize your working relationships with your partners, staff, contractors and others with written contracts or agreements. Online legal resource Nolo highlights one important reason you need formal agreements for your business:
“Although oral agreements are legal and binding in many situations, they’re often difficult to enforce in court (and in some situations, they aren’t enforceable at all). In the business world, most agreements should be in writing even if the law doesn’t require it. A written agreement is less risky than an oral agreement, because you have a document that clearly spells out each party’s rights and obligations in case of confusion or disagreement.”
Below are a few of the small business agreements you need to protect your company:
Partner agreement or founder agreement
Like a lot of entrepreneurs, your partners or co-founders might be some of your best friends or most trusted colleagues. You chose to go into business with them because you work well together. While that is likely the case, you still need a partner or founder agreement – in writing. This document will help define each partner’s roles and responsibilities in the company, his or her financial interests and obligations and will define who owns what when it comes to intellectual property.
Protect your small business intellectual property and company secrets – proactively – by having employees and other key players sign an NDA. This document should clearly spell out each person’s obligation to protect sensitive information, and it should detail the penalties for failing to comply.
Your vendors and suppliers ultimately impact the final product you deliver to your customers, and you want to protect yourself from any potential liability. These agreements should outline payment and delivery details, limits on liability and other key terms that will protect your company.
To learn more about how to protect your small or emerging business with the right small business agreements, contact EmergeCounsel today.