Starting a business is an exciting and rewarding journey, but it also comes with legal responsibilities. Legal documents are a critical part of any startup's success. Here are ten of the most popular legal documents that startups need to know about:

Business Plan:

A business plan is a comprehensive document that outlines the goals, strategies, and financial projections of a startup. It is essential for raising capital and securing partnerships, as it demonstrates the viability of the business.

Articles of Incorporation:

The articles of incorporation are filed with the state to legally establish a corporation. They include information about the business's name, purpose, and registered agent.

Operating Agreement:

An operating agreement outlines the structure and rules of a limited liability company (LLC). It includes details about ownership, management, and decision-making processes.

Shareholder Agreement:

A shareholder agreement is a contract between the company and its shareholders. It outlines the rights and obligations of each shareholder, as well as how decisions are made and profits are distributed.

Employment Agreement:

An employment agreement outlines the terms and conditions of employment for an employee. It includes details about salary, benefits, and job responsibilities.

Non-Disclosure Agreement:

A non-disclosure agreement (NDA) is a legal contract that prevents employees and contractors from disclosing confidential information. This is crucial for protecting a startup's intellectual property.

Vendor Agreement:

A vendor agreement outlines the terms of a relationship between a company and its vendors. It includes details about the products or services being provided, payment terms, and other important provisions.

Service Agreement:

A service agreement is a contract between a company and its clients. It outlines the scope of work, payment terms, and other important details.

Intellectual Property Agreement:

An intellectual property agreement is a contract that outlines the ownership and usage rights of intellectual property created by the company or its employees.

Website Terms of Use and Privacy Policy:

Website terms of use and privacy policies are essential for protecting a startup's online presence. They outline how user data is collected and used, as well as the terms and conditions of using the website.

In conclusion, startups need to prioritize legal documents to ensure their business is protected and runs smoothly. The ten most popular legal documents for startups include a business plan, articles of incorporation, operating agreement, shareholder agreement, employment agreement, non-disclosure agreement, vendor agreement, service agreement, intellectual property agreement, and website terms of use and privacy policy. It's essential to consult with legal professionals to ensure all documents are compliant with state and federal laws and tailored to the specific needs of the startup. By prioritizing legal documents, startups can minimize legal risks and focus on growing their business.

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Entrepreneurs are known for their energy and ideas. They're willing to take risks. But startup founders may be taking the biggest risk of all when they don't set up a solid legal structure for their new enterprise.

If you are starting a new business, these six legal documents for startups can make the difference between a successful venture and one that is headed for failure.

__ 1. Business Formation Documents

All startups should be organized as a formal business entity. The right business formation limits owners' personal liability for company obligations and can have important tax implications:

- If you hope to attract outside financing or you want to compensate employees with shares in the business, you should probably form a corporation.

- If you want flexibility in the way you manage the business and share profits, a limited liability company, or LLC, may be a better choice.

To form a corporation , you must prepare articles of incorporation and file them with your state. LLCs are formed by filing articles of organization with the state.

__ 2. Governing Documents

Corporations must have bylaws that describe how corporate officers and directors are chosen and what they do. Bylaws also define the rights and responsibilities of corporate shareholders, including the way shareholder meetings will be conducted.

An LLC should have a similar legal document , called an operating agreement , that describes the way the LLC will be managed, the way profits and losses will be allocated, and the rights and responsibilities of the LLC's owners, who are known as “members."

Entrepreneurs sometimes think they can bypass these important documents because the business partners are good friends who will just figure things out as they go along. But disagreements are inevitable in any business.

Without bylaws or an operating agreement to guide you, you'll waste time and money resolving your differences, and your company may even fail under the strain.

__ 3. Intellectual Property Assignment Agreement

Many startups are founded on intellectual property and high hopes. The intellectual property might be a software copyright, a secret recipe, or a pending patent for a new device. But without an intellectual property assignment agreement , the company may not truly own the intellectual property.

For example, if one of your founders created software before your company was formed, he or she owns the copyright to that software unless there is a written assignment agreement transferring the copyright to your company.

The same is true of a freelancer who creates intellectual property for you. This can cause big problems if the founder leaves the company, the freelancer refuses to assign the copyright, or outside investors ask for evidence that the company owns its intellectual property.

Your founders, employees, and independent contractors should sign intellectual property assignment agreements at the outset to guarantee that your startup does own its intellectual property assets and to prevent any challenges later.

__ 4. Nondisclosure Agreements

A nondisclosure agreement, also known as an “ NDA ," protects your startup's confidential information. An NDA typically explains what type of information is considered confidential and describes the way the information can be used or disclosed to others. NDAs are critical to protect any sort of company information that you don't want released to the general public, including such things as product information, financial data, and sales and marketing plans.

NDAs should be signed by anyone who has access to confidential information, including employees, independent contractors, vendors, outside professionals, and potential investors. A nondisclosure agreement offers important protection against having your information disclosed to competitors who might steal your product or use the information to gain a competitive advantage.

__ 5. Shareholder Agreements and Buy-Sell Clauses

While bylaws describe the shareholders' relationship to the corporation, a shareholder agreement defines the shareholders' relationship to each other. A shareholder agreement should include buy-sell clauses that explain how to handle a shareholder who leaves the company. In an LLC, buy-sell clauses can be included in the LLC operating agreement.

It's not unusual for the original founders of a startup to move on to other ventures. With a buy-sell agreement in place, valuing and buying out the departing founder's shares is a fairly orderly process.

But, if there is no agreement, relationships can sour as the founders battle over how to handle the departure. It's almost always easier and less expensive to reach an agreement at the outset than to try to resolve differences later.

__ 6. Employee Contracts

In most states, employees are “at will" and can leave at any time unless they are obligated by an employment contract. A startup with employees who are critical to the company's early success may want to put employment contracts in place to ensure that these employees stick around for a specified amount of time.

Other contracts that employees might sign include NDAs, assignments of intellectual property, and noncompete agreements.

If an employee will be compensated with stock in the company, there should be an agreement that specifies how that compensation will be calculated and paid.

If you use independent contractors, have them sign an independent contractor agreement that specifies the terms of that relationship.

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.

Ready to start a business but need help preparing all the necessary legal documents? A UpLaw business legal plan attorney can help you make sure you have all the legal documents you need for your startup. Learn about the business legal plan and how you can get access to unlimited 30-minute phone consultations on new legal matters for a low monthly fee.

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