IMPORTANT DOCUMENTS WE NEED AS A BUSINESS OWNER
It goes without saying, but documents always have a special place in every business owners’ mind. There are all sorts of paperwork involved, and they all have their purpose not only in financial but from a legal standpoint as well.
We don’t need to become a lawyer to understand some of the critical documents we need for our business, and it is essential that we take note of it. With that said, let’s take a look at some of the most important documents we need as a business owner.
Bylaws- Every entity needs a structure to function properly, and the same rule applies to our businesses. For starters, bylaws dictate how our business should operate, and almost all states require entrepreneurs that established corporations to have bylaws as their main standard.
It will tell the basic structure, the role of each individual, and how to govern our prized investments generally. Bylaws also help settle internal disputes such as fighting over a term for a high seat in a company.
Meeting Minutes- Meeting minutes is another vital document that most business owners just take for granted. For those who don’t know, most states require corporations to take note of what transpired during major events, including meetings and such. This will not only act as a written record but as insurance, just in case some dispute arose. With this, they can easily get the details from their past meetings and probably find an answer to their disputes.
These records should contain all the details and should act as the company’s memory. The place, time, and attendees should also be included in our company’s minutes. Not to mention, every significant transaction, such as voting for new policies and action, must be included in the written record as well.
Operating Agreement- Operating Agreement may not sound super important, but it plays a big part in many investments going through various states across the board. In most cases, some states require this agreement for all LLC, especially if there are multiple members involved in running a business.
This document will find its uses to define the exact role of each member and the distribution of responsibility between the parties involved. It pretty much sums up an LLC’s overall financial decisions, such as the total contribution for every profit or losses of the overall LLC and the impact for each member.
Non-Disclosure Agreement- We don’t need any degree in law and business management to understand the importance of NDAs or non-disclosure agreements for every business out there. It serves as our key to properly protect not only our interest but our business’ as well. NDA’s primary function revolves around providing security and privacy to our business. Vital details such as customer lists, financial records, or any pricing plans would spell huge trouble for our business if we let someone from our company if these details were leaked to the public.
Lawyers also suggest signing an NDA whenever our business launches a new partnership or if we are striking a deal to any of our contractors. In that way, any involved parties will be liable to protect the interest and sensitive internal information of our company to others.
Employment Agreement- Of course, we also need to pay attention to our trusted employees. Without them, our company would not run at all, so we have to place huge investments towards them in the long run. One effective way to do that is to familiarize ourselves with an employment agreement with our employees.
This legal document breaks down the obligation of the employee to the company, and the same can be said the other way around. This will give us a leeway to avoid and future disputes between the said parties.
Based on Materials from Entrepreneur