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Entrepreneurs are known to gamble with calculated risks as a recipe to success. Startups are a playground for entrepreneurs to showcase their bubbling skills and risk-taking abilities to the world. But one should ensure that they don’t end up in legal soup by missing out on any of the important legal documents that are required by every startup. Each entrepreneur should take cognizance of the following documents:


Once your startup is ready to take the plunge with private investments, a Shareholder’s Agreement needs to be put in place to determine the rights of these shareholders and their ability to exercise these rights. These agreements, like spousal support after remarriage, are extremely crucial as they define the relationship between the shareholders of a particular company.


Every organization needs a definite set of working rules or principles that govern that space. Bylaws act as those set of rules. They ensure that every startup functions smoothly with precision and gives voice to everyone involved in the startup’s operation. Bylaws can include but are not limited to voting rights to select leadership, the election of board members or taking approvals as well as other internal functioning.


What is a company without its employees? They are the most important element of your business. That is exactly why you need to ensure proper contracts for each employee in your organization as you grow. It may not seem important as a startup with limited initial capacity. But it will go a long way in making your employees understand their values and expectations of the company from them as an asset.


Company rules and policies are important for every startup. Such a document contains the overall policies of the company and certain rules which are not found in the employee’s contract. This document keeps employees alert on what to company is expecting from them. This document regulates issues relating to but not limited to start and end time of work, leave, disciplinary sanctions etc.


A Non-Disclosure Agreement is the first piece of paper that you need to reach out for when dealing with any investor or client. This document ensures the confidentiality of your company’s trade secrets, as well as that of the other party. A Non – Disclosure Agreement is not limited just to potential customers or clients but is also a viable asset to keep the reign tight on your employees. This will safeguard any potential leaks to outside sources.


A common mistake committed by new startups is the failure to check on putting up a proper business plan in place and having an incorporation agreement where there are several shareholders. The incorporation agreement will help prevent misunderstandings amongst the different shareholders as the obligations of each of the shareholders shall be spelt out in it. This document is normally put into place before incorporating the company.


For most startups, Intellectual Property and strong beliefs constitute the perfect recipe to success. However, many startups forget to secure these Intellectual Property rights. Startups also bank heavily on intellectual property as their portfolio assessment is what sells the company to probable investors. Having complete ownership of your IPs is of utmost importance.


In case of startups with multiple founders or founding parties, it becomes imperative for them to sign an agreement that defines the working relationship of all parties and form outlines to define boundaries that would prevent any disputes in the future.

While these legal documents are no sure shot recipe to success in your ventures, they are, nevertheless, a testament to your dedication to taking your startup to new heights with proper preparation.

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Diamond HILL Law Firm is made up of experience lawyers in the field of legal drafting and contract law. Whenever there is a need for the above documents, we shall be at your service.

1 commentaire

admin · 30 octobre 2022 à 14 h 10 min

Nice article

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