Contracts

Objective: Protect Yourself, Ensure Payment, and Prevent Disputes with Clear, Fair Agreements

Establish Clear Expectations

Define precise expectations with your employees and contractors to safeguard your business confidentiality and client relationships.

Draft Comprehensive Contracts

Avoid generic, impersonal contracts. Instead, obtain attorney-drafted contracts tailored to your industry to ensure they are specific, comprehensive, and legally sound.

Create an Operating Agreement

If you have business partners, draft an operating agreement that outlines ownership, decision-making processes, and other essential rules for managing the business. This agreement clarifies each partner’s roles and responsibilities.

Formalize Founders' Agreements

For businesses with multiple owners, it’s crucial to formalize each person’s rights and responsibilities through written agreements. Depending on your business structure:

For a corporation, create a shareholder agreement and articles of incorporation.

For an LLC, prepare articles of organization and an LLC operating agreement.

Engage legal counsel to ensure that these agreements and documents are thorough and legally robust.

Implement a Vesting Schedule

Set up a vesting schedule for founders and early employees to ensure long-term commitment and protect the business. A vesting schedule stipulates that stock ownership accrues over time, preventing immediate sale of shares and aligning the interests of all parties. Most investors will expect this measure before committing their funds.

By following these guidelines, you establish a solid foundation for your business relationships and operations, reducing the risk of disputes and ensuring fair and clear terms for all parties involved.

Want to print your doc?
This is not the way.

Try clicking the ⋯ next to your doc name or using a keyboard shortcut (

CtrlP

) instead.