Small Business
6 Key Legal Documents for Your Business
As a small business owner, you’re expected to be an expert in marketing, finance, legal, R&D and business development, not to mention your actual line of expertise. To help you out, we’ve put together a quick reference list of some common and useful legal documents you can use in running your enterprise:
1. Memorandum of understanding (MoU)
The MoU is a good way to kick-start an agreement – it’s a step up from a handshake but less formal than a contract as it is not intended to be legally binding. It records the terms of a deal with potential partners, suppliers or investors before a proper written contract has been prepared.
A word of warning - care needs to be taken in drafting a MoU to ensure it cannot be later found to be a legally binding contract. The law will find an agreement legally binding where the requisite elements of offer and acceptance, consideration and intention to be legally bound are present.
1. Memorandum of understanding (MoU)
The MoU is a good way to kick-start an agreement – it’s a step up from a handshake but less formal than a contract as it is not intended to be legally binding. It records the terms of a deal with potential partners, suppliers or investors before a proper written contract has been prepared.
A word of warning - care needs to be taken in drafting a MoU to ensure it cannot be later found to be a legally binding contract. The law will find an agreement legally binding where the requisite elements of offer and acceptance, consideration and intention to be legally bound are present.
2. Non-Disclosure Agreement (NDA)
If you are going to have discussions with potential investors, partners, suppliers, contractors or employees in which you will be disclosing confidential and proprietary information or trade secrets, you need to have them sign a NDA beforehand. The purpose of this document is to make clear to the party receiving the information that they can only use and disclose the information for the purposes of your discussion (and any other purposes you have decided on beforehand). While no substitute for trust, an NDA places a contractual obligation of confidentiality on the other party. Use it in any business transactions in which you will be providing valuable confidential information but don’t yet have a contract in place in which contains non-disclosure clauses. It also demonstrates that you are a savvy and sophisticated businessperson. [continue reading here]
If you are going to have discussions with potential investors, partners, suppliers, contractors or employees in which you will be disclosing confidential and proprietary information or trade secrets, you need to have them sign a NDA beforehand. The purpose of this document is to make clear to the party receiving the information that they can only use and disclose the information for the purposes of your discussion (and any other purposes you have decided on beforehand). While no substitute for trust, an NDA places a contractual obligation of confidentiality on the other party. Use it in any business transactions in which you will be providing valuable confidential information but don’t yet have a contract in place in which contains non-disclosure clauses. It also demonstrates that you are a savvy and sophisticated businessperson. [continue reading here]
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smart law for entrepreneurs
