It’s Business, And It’s Personal

Do you have the 3 contract staples every new business needs?

On Behalf of | Mar 2, 2015 | Business Formation & Planning |

In recent weeks we’ve written a number of posts about how important solid contracts are to making sure a new business has a chance of succeeding. The focus of those posts had more to do with the options for enforcing contract terms, knowing when to pull out the right tools at the right time and the importance of working with skilled legal counsel.

This week, we’re going to get even a bit more fundamental for those in North Carolina who might wonder just what forms might be most important. Opinions vary, but the following perspective is one we believe most legal experts would agree with.

To begin with, it’s useful to remember that it’s very easy to enter into a contract. As we noted in one post, all it may take is simply nodding your head. However, having something documented is the surer way of making sure that all parties’ rights and responsibilities are understood and agreed upon.

Not every business involves partnerships. But where two or more with an interest in what happens exists, it’s wise to draw up a partnership agreement. By documenting nitty-gritty issues such as how decisions will be made, what parties are contributing and how they’ll be compensated, conflicts can be minimized and resolutions reached faster when disputes do come up.

Proprietary information such as formulas, designs and the like may be the greatest edge a new startup has. But getting backers may be critical, and that means letting someone in on secrets. To protect confidentiality, you might need to be able to pull a non-disclosure agreement out your pocket. So that should be a contract you have readily available.

If producing your goods and services is labor intensive or you need some specialized help to get your business going, you may need to call on some outside expertise. Independent contractor agreements should be on hand so that you can spell out just what’s expected.

You especially want to make clear that you have no obligation for workers’ compensation or payroll taxes for that work. And beware if you put on too many controls, the IRS might reject claims that the worker is independent.

Also, don’t trust that a template contract you find online will be enough. An attorney’s review of your drafts should be sought.