What Legal Contracts Are Important In A Startup?
The types of contracts your business will need is very dependent upon the nature of the business and whether you are going to have vendors or customers and whether your business is product-oriented or service-oriented. You may need to have a non-compete agreement with employees so that they cannot take business away. There will have to be contracts and people sometimes draw their own, which usually ends badly. A lot of contracts that were not drafted by an attorney miss out on very important terms.
Attorneys who practice business law are skilled at drafting contracts and skilled at reviewing contracts. One of the main purposes of hiring a lawyer is to anticipate problems. If you can anticipate the problems, you can then either eliminate the exposure to them or mitigate the exposure to them. The attorney should be helping the client navigate those contractual issues.
A typical business owner doesn’t really understand the nature of legal terms and the impact that they have. A lot of may seem like small print but it does come into play. If you enter litigation and your contract was not drafted correctly, you may lose on a very simple issue that could have been addressed but was not.
What Legal Considerations Should Be Involved When Making The First Hire?
Employees can make or break a business, so take the time to find someone who is trustworthy and competent, and matches your particular business model. You may or may not have employment agreements, depending on how sophisticated the business is. Florida is an at-will state, so you don’t have to terminate for cause but you may have some contractual relationships that spell out why a person can be fired. You may have a contract that says you have to pay this person and if you terminate them without cause, you have some monetary obligation.
You may be in a business where you want the employees to sign a non-compete agreement or an intellectual property agreement so that they don’t disclose to competitors the intellectual property that belongs to your company. It is also really important to have an employee handbook. If you have enforceable terms in that policy and you make sure that the employee signs it, then you won’t have any problems if they violate that particular policy.
If you just sit down with an employee and verbally discuss your employee policies, and nothing is put in writing, then it is going to be much more difficult to prove that the employee was aware of the policies. Policies should always be checked by an attorney and, if possible, enforced by a human resources department.
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