As a new business owner, it does not have to be an overwhelming process to get your legal affairs in order. Whether you are a one (wo)man band, a few friends with a great idea, or an established business already turning that money over, there are certain legal documents that are non-negotiables.
- Incorporation documents
There are many vehicles you can use to drive your business. Deciding whether you want to operate as a sole-practitioner, partnership, or company, will require some serious thought, as they each have their own tax and liability considerations.
Irrespective of what vehicle you decide on, it’s important to make sure you’ve done everything you need to stay on the right side of the law, which might include: registering the company with the Companies Office and SARS, drawing up a partnership or shareholders agreement, and drafting a memorandum of incorporation.
- Intellectual property documents
This has been, in my experience, the most overlooked aspect by all business owners (small or otherwise). But, when it comes to raising funding (I’m looking at you especially Tech Start-Ups), or enforcing your rights, the first thing to come up will be your intellectual property.Like tax, intellectual property (or IP) is something every single business needs to consider. Repeat after me: “Every! Single! Business!” And again louder for those in the back: “Every! Single! Business!”You don’t have to do all of it at once (trade marks, for example, can be registered later, but more on that in a later post). But, you need to have an IP assignment agreement in place at the very least. Did you know that if you outsource the development of your logo, website design, software code, or marketing materials you might not own the copyright in it? Spoiler alert – there is a 99% chance that without a written IP assignment agreement in place, you do not own the IP in these things. Yup, even if you paid good money for it.
- Non-Disclosure Agreements
There are mixed reviews about whether a non-disclosure agreement is really necessary, or practical as a start-up. Some businesses have found that when they have given one to those mammoth corporations to sign before a funding pitch, they have simply been laughed at.Whatever your experience is, it is still worthwhile to have a basic NDA in place that potential funders, service providers, and partners can sign. This should set up what you consider to be confidential information, who owns the IP being discussed, how the confidential information should be handled, and how long the confidentiality applies.
- Data Policies
When it comes to these business documents, it’s important to start somewhere rather than being caught up in that sweet new company smell so much that you don’t do anything at all. You don’t have to feel overwhelmed, just start somewhere and ask for help if you need to.