When starting a new firm, there are plenty of legal essentials to take care of first. For example, you’ll need the right business legal forms. In this blog post, we’ll show you what every leader requires when getting their company off the ground.

Defining Your Business Structure

You must decide which structure your business will use when trading. The format you pick has a range of implications, including your liability and overall power. For example, if you’re running the business alone, a sole proprietorship makes you fully liable for its debts.

A limited liability company gives you flexibility for long-term growth and keeps your assets safe from seizure. You also won’t require a board of directors, meaning you and your partners will remain independent.

Key Legal Documents for Businesses

As a business leader, you’ll need a number of important documents. Some of these might even be necessary before you start formally operating. You should be able to find low-cost templates of these documents online. 

With this in mind, here are seven key documents that will help your business in its early years:

• Business formation documents: Articles of incorporation or organisation formally state your firm’s structure. You’ll also need a document to outline any existing partnerships.
• Employment contracts: You must have robust employment contracts that precisely suit your sector and exact roles. If you’re hiring freelancers, you need contracts to match.
• Non-disclosure agreement: Your employees or partners may be privy to sensitive data. An NDA prevents them from sharing the details with your competitors or anyone.
• Supplier contracts: If you’re procuring goods from vendors, you’ll need strong contracts fitting your needs. For example, you might include a small business payment plan.
• Lease agreement: Your business will likely need to rent a storefront or office space. You must look over the lease before signing to ensure it’s completely fair.
• Risk assessments: If there are any hazards in the workplace, outline them and work to minimise them. This way, you’ll have a plan in place for any disaster.
• Succession plan: It’s never too early to plan who your business will go to after you. You might decide to shift gears and careers, for example.

^{Supplementary reading: Required Documents To Obtain When Starting A Business}

The Importance of IP Protection

You should trademark your company’s name and logo as soon as possible. You must also see if they’re too similar to existing businesses. Even if the resemblance won’t be a legal issue, it may lead to confusion among potential customers.

Your company’s works are automatically under copyright. For example, any books the business publishes, or its marketing materials already have ample protection. However, registration gives them even greater shielding from infringement.

Drafting a Company’s Code of Conduct

Your code of conduct sets out your expectations for the company. Every employee should read it before starting work. If someone violates one of the rules within, this may even be grounds for termination. Every document is different, but common expectations include:

• A high standard of professionalism
• Treating colleagues and customers with respect
• Adherence to relevant local, national, and international laws
• No discrimination or harassment of any kind
• Report code of conduct violations to the relevant party
• If applicable, always keep private or sensitive data safe
• Only use the company’s equipment for business purposes
• Full compliance with health and safety rules

Be ready to adapt your company’s code of conduct to your specific workplace.

Getting the Right Insurance

You must ensure that your business has appropriate insurance to protect it against a wide range of financial damages. For example, general liability insurance will help if someone accuses your firm of damaging them or their property. It can pay for the litigation and even the settlement.

Even if you can’t run your business, insurance ensures you can still pay your staff. For example, if a flood or earthquake damages your equipment, you may have to close temporarily. Business income insurance helps you recover and keep paying your team until you’re ready to reopen.

You’ll also need more specialised insurance to match your business needs. If the company uses or stores data, cybersecurity insurance might be necessary. This helps cover losses from a data breach or cyberattack. Carefully consider which insurance your firm will need before investing.
^{Read more: 10 Types of Insurance: Which Ones Are Most Critical to Have?}

The Need for Legal Consultation

Many businesses have lawyers on retainer. This means they could get legal help at virtually any time. If retaining is too expensive, you should still find an affordable legal professional in your area. 

Lawyers help you make sure your business stays legally sound. They’ll guide you through major business negotiations and even disputes. However, drafting business documents using online templates lets you avoid many unnecessary legal fees.

Final Thoughts

Starting a business of any type involves many steps. Missing one of these could open you up to a range of legal challenges. However, securing free document templates online lets you plan for nearly any possibility while remaining legally compliant.

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