After incorporation, companies registered under the Companies Act, 2013 become body corporate. Being a body corporate or a legal person entitles the company to many rights, some of which include having the right to own property, the right to enter into legal agreements, and the right to sue or be sued in case of legal breach. As you know, after new company registration is complete and the company commences business, it needs to have certain backing to protect its rights. That’s how legal agreements come into the picture. This article briefs you on the 10 essential legal agreements that will come in handy post-new company registration!
Shareholders are the owners of the company, they invest in the company through shares. Further, they are the ones with the most power in management decisions, apart from the Directors. Hence, to avoid future clashes, and to have clarity on the holding, rights, and responsibilities of all members of the company, it is important to have a proper shareholders’ agreement in place. Lastly, it also describes the share distribution and other roles of shareholders, details of meetings, voting rights, etc.
Non – Disclosure Agreement
A nondisclosure agreement is one of the most important agreements for a company. Each business has its fair share of trade secrets and other confidential information such as the client database, the know-how, and more. The company needs to protect its confidential information from all third parties such as employees, contractors, vendors, other businesses, etc. Signing an NDA with a third party before entering into a business relationship can help your confidential information from being misused.
After the incorporation of a company, you need to hire employees to run the company. The hiring process for most companies is different. However, the common step is the personal interview round, after which the company can make an offer to the employee. This offer is made through an offer letter. The company then gives the employee a deadline for acceptance. When a candidate signs the offer letter and sends it back to the company, it is known as the acceptance of the offer letter.
The employment agreement also forms a part of the hiring process. It comes after the candidate accepts the company’s offer letter. The employment contract, however, is more detail-oriented. It sets out the entire employment relationship between the employer and the employee. Further, it gives out details of the employment such as the remuneration, duties, roles and responsibilities, incentives and other benefits, etc.
Vendor Supplier Agreement
An operational company has its internal infrastructure needs. Vendor Supplier Agreements are the contracts that set out the terms of buying office supplies and other infrastructural materials from its suppliers. This helps in having an accurate account of the office supplies and stock.
This comes in handy if the company is leasing office space or some other property. A registered lease deed is the legal proof of your authority to use the property. Further, it also sets out the terms of the lease between the landlord and the leasing party.
Most startups today hire freelancers instead of employees for certain tasks such as SEO, content, software development, etc. Now, when you hire a freelancer, there is no legal obligation of any parties just based on an oral agreement. That’s when freelance agreements come into the picture. It will set out the term, roles and responsibilities, the terms of payment, consequences of breach, etc.
Non Solicitation Agreement
When the company enters into a business relationship with the other party, sharing business contacts and other details becomes inevitable. A nonsolicitation agreement is a legal contract that creates a negative imposition on the parties. The negative imposition is usually for the terms that the party will not solicit or try to solicit any business information or contact belonging to the company.
Service Level Agreement
This Legal agreement is most commonly used in the software development and IT industry. Many times, companies hire service providers who are not employees but are independent businesses. Now, when you hire a service provider and set the terms of their hire, you also need to focus on giving the standards of service. The SLA focuses on just that. Service level agreements set out the roles, responsibilities, and payment terms of the parties along with the KPI (Key performance indexes), security practices, and minimum standards to be maintained.
Today, Service Level Agreements, vendor agreements, NDAs, etc. are becoming a need of the hour as soon as a business commences. However, it is very important to note that the specific requirements related to this agreement might vary depending on the location, nature, and other details of the business. Connect with experts today to find out the essential documents for you!