When you are starting a business, you have to consider some legal documents to ensure you are incorporating a company legally. These necessary documents allow the customers, business partners and government to run a business following the local laws.
There are many government mandatory documents and a few others used to prevent legal disputes with competitors, employees and shareholders. The brief details on all required documents are as given below:
Required Documents to Start A Business
The Constitution of a Company
Once you have decided to incorporate, preparing the constitution of the company is the prominent document. It requires the signatures of initial shareholders. The elements to be included in the document are:
- Your legal name & business address
- Details of main business objectives
- Financial information
- Explain shareholder relationships
- Liability clause stating the shareholders are only liable for your business debts up to their investment amount.
- Company assets, a total of amount of capital and how it is allocated among the shareholders including the types of shares.
Articles of Incorporation
Every company type has advantages and disadvantages, but some companies with multiple shareholders form a C Corporation. In addition, to form this you have to file articles of organization with your local state.
Bylaws & Operating Agreements
Every startup business should have a set of bylaws completing the below topics:
- Leadership selection
- Rights & power of shareholders
- Voting thresholds for essential decisions
- Selection of corporate officers, directors and their respective duties
- Handling of disputes
It applies to LLCs and they set forth vital details of company operations such as:
- LLC Management
- Distribution of profits & losses
- LLC owners’ responsibilities and rights
- Buy/sell clause
NDA helps to protect sensitive information of a company not to release publically such as marketing plans, or financial data.
While planning to establish a company, you must record all legal structure changes of your business in the statutory books. It includes changes such as company directories, company name and more.
Intellectual Property & Technology
There are two types of intellectual property assignment agreements, which can help attract the investors for a startup company.
- Technology Assignment Agreements: Assign IP created before forming a company
- Invention Assignment Agreements: Assign IP ownership of new work produced developed your employees after forming the business.
Shareholder Agreements & Stock Purchase Agreements
However, there is no specific use of shareholder agreement neither by law nor publically, they are valuable to make sure a fair treatment of shareholders relationship.
Stock purchase agreements occur between the corporation and shareholders. They include the amount of stock of purchase, payment methods, prices and other details. They can be either restricted or non-restricted.
If you need help about startup business legal documents, feel free to reach us at Ismail Alptekin Business Developer and discuss the details.