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Five Legal Documents that will Save your Small Business

More often than not, small businesses are simply unaware of what Legal Documents are necessary to protect and grow their business.

PROTECTING YOUR INTERESTS WITH LEGAL DOCUMENTATION 

Protect your interests, avoid costly legal pitfalls, and maximize the likelihood of success for your business with these five legal documents (that every African Startup/Business should have):

Memorandum and Articles of Association

This document is the most overlooked even by lawyers. A well drafted Memart is the best legal foundation for your business. It usually contains clauses regarding;

Legal Name/Business Address

Business Objectives

Business Regulations

Shareholding Formula

Voting Rights

Operating Agreement/ Shareholders Agreement

This agreement usually states the terms and agreement upon which the company would be run. This could be dispensed with if the Memorandum and Articles of Association are properly drafted.

It usually sets out the following terms;

Leadership Selection

Dispute Resolution

Shareholders Rights and Duties

Voting Thresholds

Distribution of Profits and Losses

Buy/Sell Clause

Intellectual Property Assignment Agreement

This is a must have document for freelancers, creators and MSMEs alike. It assigns all the intellectual property created before/after incorporation.

Independent Contractors Agreement

It is important to always put your business relationships with vendors and other contractors who work for you in writing. This agreement will set out their roles and responsibilities.

Employee Contracts

If you have employees then you should invest in an employment contract. This will state clearly their;

Salary

Job Roles/Responsibilities

Share Options

Notice Period

Bonuses

Non-Disclosure Agreements

Non-Compete Agreement

Starting a new business is a lot of work, and it can seem like there aren’t enough hours in the day to get it all done. But by paying attention to your legal startup documents as you create your business, you can protect your investment and prevent a lot of troubles down the road.

CONCLUSION 

While these legal documents are no sure shot recipe to success in your ventures, they are, nevertheless, a testament to your dedication to taking your startup to new heights with proper preparation. So put some effort into getting the legal formalities out of the way for a brighter future as a company.

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