Are you ready to start a business but are unsure of what documents you need? No need to worry because here at go NDA we can help you draft the necessary legal documents to get your business up and running.
Scroll down to find out what documents we consider essential when starting out in business.
An Employee Agreement, sometimes known as an employment contract, is a binding agreement between an employer and employee that outlines the terms of a job.
Who needs an Employee Contract?
Employers, and anyone managing employees on behalf of an employer, may create an Employee Contract each time they make a new hire.
What Is In An Employee Contract?
- The type of employment the contract is for such as full time, part time, or seasonal and permanent or temporary
- The start date
- Location of employment
- The employer’s and employee’s information
- The probation period and notice period
- Terms relating to payment such as method, frequency and amount
Types of Employment Contracts
Employee Agreements may appear to be similar but include entirely different terms, depending on whether the employee is hired to work permanently or temporarily and whether this is on a full-time or part-time basis.
A permanent Employee Agreement should have no predetermined end date within the contract whilst a full time contract, as defined by the IRS, is at least 30 hours per week.
Conversely, a fixed-term Employee Agreement should include a predetermined end date, requiring no notice period from either party to end.
INDEPENDENT CONTRACTOR AGREEMENT
What Is an Independent Contractor Agreement?
An Independent Contractor Agreement, also known as a Consulting Agreement is a legal contract that outlines the scope, payment schedule, and deadlines for freelance work.
What Is an Independent Contractor?
Independent contractors such as freelancers or consultants are workers hired to provide specific services, for example:
- Creative work, i.e. writing and photography
- Landscaping and outdoor maintenance
- Construction, renovations, and demolition
- Bookkeeping and accounting
What Is the Difference Between an Employee and an Independent Contractor?
Employees and Independent Contractors several ways.
- Pay their own income taxes
- Can build their own schedules
- Work with clients (individuals or businesses) on a contractual basis
- Can hire subcontractors to assist them on a project
In essence, an independent contractor can be seen to hold more freedom than an employee.
Why Hire an Independent Contractor?
Small businesses, particularly startups, employ independent contractors to:
- Access specialized skills and industry expertise
- Achieve a short-term project
- Save on costs, including employment benefits and office space
What Should I Include in an Independent Contractor Agreement?
An Independent Contractor Agreement may include the following terms:
- What services the contractor is being hired for
- Length of the contract
- Payment, whether this is a flat fee or an hourly/weekly rate
- Invoice frequency
- Who owns the rights to the work
- Confidentiality clause
MUTUAL NON-DISCLOSURE AGREEMENT
A mutual non-disclosure agreement is a legal document between two parties that agree not to disclose confidential information to any third party. If either party releases any of the confidential information shared, that party may then be liable for monetary damages.
What Is the Difference Between an NDA and a Mutual NDA?
A Non-disclosure Agreement is a legally binding contract that establishes a confidential relationship between two parties.The parties signing the agreement agree that any sensitive information may be obtained and will not be made available to any others. An NDA can also be referred to as a confidentiality agreement.
Non-disclosure agreements when used by businesses who are entering into negotiations with one another are often referred to as Mutual Non-disclosure Agreements. In this instance, mutual NDAs allow both parties to discuss sensitive information without fear that it will be disseminated to the public and/or competitors.
Requirements for an NDA
NDAs can be tailored to the needs of the involved parties, however, there are six major elements that are considered essential:
- Details of the parties to the agreement
- A definition of confidential information – this is subjective to the circumstance
- Any exclusions from confidentiality
- A statement of the appropriate uses of the information to be revealed
- The time periods involved
- Miscellaneous provisions
What is an Operating Agreement?
An operating agreement is a key document used by Limited Liability Companies (LLCs) that outlines the business’ financial and functional decisions i.e. rules, regulations and provisions.
The purpose of an Operating Agreement is to govern the internal operations of the business in a way that suits the specific needs of the business owners. Once the document is signed by the members of the limited liability company, it acts as an official contract binding them to its terms.
Do You Need An Operating Agreement For Your LLC?
LLCs in Delaware, Maine, Missouri, or New York, are required by state laws to create an Operating Agreement.
However, regardless if a state does not require a written company agreement, it is important to note that an Operating Agreement is crucial to a business’ internal operations. Without an Operating Agreement legal actions brought against a company will rely on the provisions established by a state’s LLC code.
An Operating Agreement defines company processes clearly, such as how to distribute profits and losses and which members have the authority to bind the company to legal contracts. As such, multi-member LLCs can use this agreement to reduce the chances of disputes between members.
What Should An Operating Agreement include?
- Company Information
- Membership Information i.e.value of capital contribution and percentage of members’ ownerships
- Distribution of assets should a member leaves or the company dissolve
- Admission of new members
- Administration Processes
- Other Details – Miscellaneous
- Voting rights and responsibilities as well as Powers and duties of members and managers
- Distribution of profits and losses
Can The Terms in an Operating Agreement Be Changed?
Yes, the terms of an Operating Agreement can be changed in writing and signed by all the members of the LLC using an Addendum.
Why Is An Operating Agreement Important?
An Operating Agreement is important as it protects the business’ limited liability, clarifies verbal agreements and offers a business the right to operate to tailored rules as opposed to State default laws.
What is a Partnership Agreement?
A Partnership Agreement is an internal business document, as well as a legally binding document, that outlines business practices for the partners of a company.
A Partnership Agreement establishes rules for how partners will manage business responsibilities, ownership and investments and profits and losses.
There is no limit to how many partners can form a business partnership.
Why Is a Partnership Agreement Important?
In the absence of a Partnership Agreement, a partnership’s operation will be governed by State partnership laws which offer a standardized approach to running a partnership and may often generate undesirable results.
What Should a Partnership Agreement Include?
- Business Information, i.e. name, contact information and description of the business
- Ownership – Percentage interest
- Capital contribution
- Profits and distributions
- Withdrawal or addition of a partner
Types of Partnership Agreements
- General: All partners equally share liabilities, profits, and assets.
- Limited: Limited partnerships protect partners who do not contribute capital equally.
- Limited liability: Limited liability partnerships function much the same as general partnerships, but give the partners limited personal liability while maintaining equal shares of the company and its profits.
Starting a company means lots of documents that need to be drafted, signed and notarized. Visit the go NDA app to learn more about how our Template Library can help you start-up your business with ease, directly through your phone.