Starting Up: The Must-Have Contracts

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Here’s a brief checklist of contracts and agreements which should be in place by startups and new ventures in the expansion/ growth phase.  In other posts, I have written about the details for Founders Agreements, which are essential for early stage startups.

1.  Depending on the form of entity chosen, a comprehensive Stockholders Agreement (corporation), Partnership Agreement (partnership), or an Operating Agreement (LLCs) should be in place if there is more than one member than just yourself.

2.  Employment or Consulting/Independent Contractor Agreement:  An employee or independent contractor must agree to keep New Venture information confidential, preserve trade secrets,  and if necessary, agree to a non-compete clause.

3.  Assignment Agreement:  If any owner of the New Venture creates anything for the NewCo, they should be required to assign ownership to NewCo.  In some instances, assignment of existing intellectual property to the Company is a member/owner’s capital contribution to NewCo.

4.  Sales Agreement/ License Agreement/ Service Agreement:  NewCo will need agreements with its customers.  Usually, a template is established that provides uniformity to the standards that will be in place for goods offered for sale.  If there is intangible rights, or creative works, it does not involve a “sale” but instead a right of use, or a license.

5.  Terms of Use/Privacy Policy for the NewCo Website:  Yes, it seems generic, and yes, many owners may crib from an existing website.  But that’s not lawful, and it pays to do this once, the right way, and tailor it to the business.

6.  Office Lease.  As important  a document as any that New Venture will enter into, given that there usually will have to be a personal guaranty of New Venture’s payment and performance obligations.

 

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