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7 key legal documents required for your business

7 key legal documents required for your business

Legal & Compliance

Vakilsearch Staff

Vakilsearch Staff

30 May 2018, 09:51 — 10 min read

Summary: What are the essential documents to safeguard the legal interests of your SME? Read further to find out if your business has these documents in place. Also learn more about a special offer to avail 3 legal services for an unbeatable price of INR 2,018.

 

Fundamental legal documents play a crucial role in protecting the interests of a company and its stakeholders. But it’s surprising to know how very few businesses have actually got them in place. Some skip these vital steps not realising that these documents help in getting their affairs in order, which prevents legal complications in future.

If you are a budding entrepreneur or have plans of becoming one, we have made a list of the 7 key legal services which should never be ignored before going into business:

 

1. Founder’s Agreement (Operating Agreement)    

To avoid any conflict among founding parties, all co-founders should sign a comprehensive operating agreement. When there are multiple members involved, it becomes necessary to define how key business decisions will be made, how profits and losses will be distributed, what are the rights and obligations of members and what happens when someone wants out of the business etc. The operating agreement defines the business relationship of the founders and it will also contain conflict-resolution clause that can help prevent disputes. Without this agreement, your business may spiral down since it lacks a structured hierarchy.

 

To get a Founder’s Agreement and secure the future of your business against unforeseen contingencies, click here.

 

2. Intellectual Property Assignment Agreement

An IP assignment is an intellectual property (IP) transaction. It deals with the ownership and disposition of intellectual property rights as well as with the control over the use of or access to intellectual property.

 

It fundamentally pertains to the transfer of intellectual property rights from the owner of the rights to a different person or organisation. It is a written and enforceable contract which formalises an agreement between different companies for the purchase and sale of intellectual property rights. It can be made with respect to trademarks, copyrights or patents.

 

An intellectual property assignment agreement is a key legal document that the investors look for funding decisions.

 

3. Terms of Service

Terms of service, also known as terms and condition or terms of use, is an agreement that helps you to set out the rules and guidelines that users or visitors must agree to in order to use your website or the web-delivered product. It act as a legally binding contract between you and your customers. In this agreement, you can include:

 

  1. Intellectual Property clause to inform the users that you are the owner of your content and this content is protected by international copyright laws.

  2. Termination clause can be used in websites that have a registration section, as you can disable or ban the abusive users based on the activity of their accounts.

  3. Warranty disclaimer that is used to limit the website owner’s liability in cases where errors are found in the content given on the website.

  4. Governing Law clause can be used to refer to the jurisdiction that applies to the terms and conditions.

 

Even though ‘terms and conditions’ are not mandatory by law, it’s still a smart thing to include as these pages can limit your liabilities and will also protect your rights to the content contained in the website.

 

Want to secure your Intellectual Property Rights? You can do so with a click by availing this offer.

 

4. Privacy Policy

If you gather any information from your customers or website visitors, you are legally required under the IT Act to post a privacy policy that outlines how this information will be used and not used. Your business should develop privacy practices unique to your business. Privacy policies should cover online as well as offline uses of personal information, because each use carries unique challenges. As per the privacy rules prevailing in India, corporate bodies that collect, receive, possess, store, deal or handle information, shall provide a privacy policy that discloses its practices regarding the handling and disclosure of personal information including sensitive information and ensure that the policy is available for viewing, including on the website of the corporate body (or the person acting on its behalf).

Privacy policies makes your clients feel secure as it will provide the customers a clear picture of why and how you process their personal data.

 

Make your Privacy Policy GDPR Compliant

GDPR is a new legal framework from the European Union that took effect on May 25, 2018.

GDPR applies to any business that meet either of the following criteria irrespective of where the business is located:

  • Offers products or services to citizens of the EU

  • Collects personal information from citizens of the EU

 

GDPR requires you to disclose more information in your privacy policy in a more concise and clear way. The primary requirement of GDPR is an informative yet user-friendly privacy policy and a concise summarised privacy notices.

 

Privacy Policies are an essential requirement for your enterprise. Get a Privacy Policy to put your business on a sound legal footing.

 

5. Non-Disclosure Agreement (NDA)

It is an accepted fact that some business information should remain private and undisclosed. A non-disclosure agreement is the first line of defence in protecting confidential information. It is an agreement in which all involved parties agree not to disclose the specified confidential information. Thus, this legal document creates a confidential relationship between your business and any contractors, and other business partners to protect any type of private and proprietary information or trade secrets. A non-disclosure agreement should detail on all proprietary information that will be shared.

An NDA should contain the following clauses:

  • Definition of confidential information

  • Disclosing and the recipient parties

  • Terms and duration (time frame)

  • Permitted use of the information

  • Legal obligation to disclose

  • Acceptable remedies

  • Non-binding clause

 

If your business has confidential information such has designs, manufacturing processes, concepts, customer or client data, create a NDA to protect it.

 

6. Employment Agreement

An employment agreement is a legally binding document that lays down the stipulations relating to the performance of an employee’s duties during the course of his/her employment. It is a bilateral agreement entered into between the employer/company and employees with an aim to minimise future disputes. This agreement specifies the terms and conditions of the employment, recognises the rights, expectations and obligations of both employers and employees. Thus the main advantage of using an employment agreement is that it allows for a high level of specificity with regard to the details of employment.

 

Create an Employment Agreement, to give the kind of specificity to job roles in your company that helps improve performance, raises accountability and creates better outcomes.

 

7. Sexual Harassment Policy

A sexual harassment policy is a policy that is focused on the prevention and management of sexual harassment in the workplace. As per the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the employer is required to:

1. Provide a safe working environment.

2. Display the consequences of involvement in sexual harassment in a prominently noticeable way at the workplace.

3. Display the order constituting the Internal Complaints Committee.

 

Implementation of these responsibilities is conventionally undertaken through a written sexual  harassment prevention policy. This policy can also be written in partnership with employees and trade unions. The policy should be translated into relevant community languages where required so, it is accessible to employees from culturally and linguistically diverse backgrounds. This policy should be periodically reviewed to ensure it is operating effectively and contains up-to-date information. The information on sexual  harassment can be incorporated into a general workplace harassment policy which covers other forms of unlawful harassment. But there is a need for a stand-alone sexual  harassment policy, particularly if sexual harassment is a common problem with the workplace.

 

In a bid to help young startups, Vakilsearch is offering 3 Legal Services for the unbeatable price of just Rs. 2,018. This offer is exclusively for GlobalLinker members and includes all the above mentioned 7 services (PLUS MANY MORE!) Hurry, offer valid only for the first 2018 members!

 

To explore business opportunities, link with us by clicking on the 'Invite' button on our eBiz Card.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker.

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Vakilsearch Staff

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