5 Essential Legal Documents to Keep Your Business Protected
5 Essential Legal Documents to Keep Your Business Protected
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Written by Nicholle Overkamp

June 22, 2022

If you want to grow and scale your business with peace of mind, we highly recommend working with a legal professional to make sure your business is protected. Making sure that all of your legal bases are covered can prevent potentially devastating consequences, including fines and lawsuits.

While we always recommend working with a legal professional to make sure your business covered, there are some best practices you can use to get you started.

Here are five essential legal documents small business owners should have for their employees and clients:

1. Non-disclosure agreements

If you have trade secrets or other confidential information, you’ll want to have employees and any contractors who are privy to sensitive information sign non-disclosure agreements. This will help protect your business from competitors who might try to steal your ideas.

A non-disclosure agreement should include the following:

  • The confidential information that will be shared
  • The parties involved in the agreement
  • The date the agreement goes into effect
  • What will happen if the confidential information is shared without permission
  • Any other important details

Non-disclosure agreements protect confidential information. This can include anything from trade secrets to customer data. It’s important to have these agreements in place so that you can protect your business’s sensitive information.

2. Employee handbook.

Employee handbooks can help protect your business from lawsuits by setting out the expectations and rules for employees. They can also help you clarify which employees are considered “at-will” and can be terminated at any time.

The content of an employee handbook will vary depending on the size and type of business, but some common topics include:

  • Hours of operation
  • Leave policies
  • Dress code
  • Attendance policies
  • Compensation and benefits
  • Harassment policies

If you’re not sure where to start, consider hiring a lawyer or an HR consultant to help create your employee handbook. They can help make sure your policies are legally compliant and will help protect your business in the event of a lawsuit.

3. Non-compete agreements

If you’re a small business owner, you may want to consider having employees sign non-compete agreements. This will help protect your business from competitors who might try to steal your employees.

A non-compete agreement should include the following:

  • The employees who are covered by the agreement
  • The type of information that is protected
  • Geographic boundaries
  • Time period the agreement is in effect
  • What will happen if the employee violates the agreement
  • Any other important details

While non-compete agreements are not always legally binding, they can be used as evidence in a court of law if there is a dispute. If you’re worried about the competition trying to poach your employees, it’s a good idea to have them sign an agreement.

4. Service contracts

If you provide services rather than products, you’ll want to have service contracts in place. This will help protect you from being taken advantage of by clients, and will also help clarify the expectations and terms of the relationship. Service contracts can be used to protect both parties involved in the transaction, so it’s important to have them in place before starting work with a new client.

The specifics of what should be included in your service contracts will vary depending on the services you offer, but some things to consider include:

  • The services you will provide
  • The price for those services and how that payment will be accepted
  • How long the contract will last
  • What happens if one party breaches the contract
  • Who is responsible for damages that may occur as a result of the contract

5. Liability waivers

If you’re running a business that involves any kind of physical activity – like a gym, dance studio, or martial arts school – you’ll want to have liability waivers in place. This will help protect you from being sued in the event that someone gets injured while participating in your activities.

Liability waivers should include the following:

  • The types of activities that are covered by the waiver
  • The risks associated with those activities
  • The parties involved in the agreement
  • What happens if someone is injured while participating in the activities
  • Any other important details

It’s important to have liability waivers in place before someone gets injured, as it can help protect you from being sued.

Just an FYI – this is not an exhaustive list! We can’t stress enough how important it is to work with a lawyer you trust. We recommend our friend Lane Lyons to help you navigate the legal side of running your business. You can also check out her Protecting Your Small Business Wealthy Wednesday live in the Money Bitch Community (live June 22nd, 2022 at 6 PM ET, or catch the replay).

As always, if you need help growing and scaling your business, we’ve got you. Learn more about our business coaching services by booking a discovery call.

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