5 Legal Documents You Absolutely Need for Starting a Small Business

Whatever may be the scope and scale of your startup, having the proper legal documents is critical. With the advice of a civil lawyer, make sure to get the mandatory federal and state permits according to the nature of the business you’re establishing.

You must also get licenses and valid business identification tax numbers to keep the company legitimate and avoid hefty fines and penalties. Not only will you ensure compliance with the regulations in your location, but you’ll reassure vendors and customers about the legitimacy of the business. Here’s a quick overview of the paperwork you must have in order.

1. Business Registration

Whether you’re starting a partnership or an LLC, it is mandatory to get the company registered with the secretary of state or county registrar. Check with your lawyer for information about the benefits, downsides, and tax implications of each business type. If you don’t have one yet, a free lawyer consultation can help you find the right match. Registering the right kind of business is mandatory to run the company legally. You’ll also safeguard your personal and family assets from the risk of getting targeted for legal action, bankruptcy, and any financial issues. Also, get the Business Tax Identification Number to pay taxes, hire workers, open bank accounts, and keep with other legal requirements.

1. Partnership Agreements

In case you’ve opted to start a company with a friend, you’ll draw up an agreement that clearly defines the terms of the partnership, responsibilities, liabilities, contributions of assets, intellectual property, or monetary investments. You’ll also define how profits will be shared and what happens if one of the partners decides to opt out. Having these details clearly outlined and signatures verified by remote notarization will help you avoid legal disputes down the line. Get the advice of an experienced attorney to help you draw up the documents.

1. Real Estate Agreements

One of the essentials of starting a new company is an official address. You may need to lease office space, a storefront, a warehouse, or a location to set up a manufacturing unit. Most commercial leases are drawn up to run from five to ten years. When signing the lease agreements, it is advisable to retain the services of a civil lawyer to go over the paperwork and check the legal validity of the papers. Details such as the monthly rent, terms of usage, and the overheads like utilities, insurance, and maintenance should be clearly outlined in the document. 

1. Licenses and Permits

Depending on the kind of business you’re operating and the products and services you provide, you must get the proper licenses from the federal, state, or municipal governments. For instance, if you’re setting up a restaurant, you may have to comply with local health regulations, safety checks, and anti-nuisance laws. However, if you’re producing goods, you may have to get permits from the relevant zoning authorities and environmental protection laws. 

1. Online Payment Processing 

If you’re running an eCommerce business, you’ll need to sign up with a reputable payment processing company to receive credit and debit card payments from customers. These companies offer a full suite of services, including safeguards to protect your new company from the risks of chargebacks and fraud. You’ll enter into a legally-binding agreement with the service provider in which various details are clearly specified, such as the terms and conditions. Additional information about the setup charges, monthly fee, membership costs, batch fee, and PCI compliance charges are also outlined. 

Establishing a startup involves having the necessary paperwork organized to stay compliant with the legal requirements of the location where the business is based. Work with your attorney for information and avoid the risk of costly legal issues that can wipe out the company.