4 Legal Agreements Every Business Owner Needs

We all know a few lawyer jokes but the reality is that a few well thought out legal documents, written by qualified attorneys of course, can save a business owner a remarkable amount of time, energy, and stress. Here are a few every business owner needs to operate under any circumstance. Please try not to use generic templates available from your associations, or copy a competitor’s document, as you do not know the origin or legitimacy of either format.

Power of Attorney

This gives a trusted individual the right to make financial decisions on your behalf, such as writing a check, selling an asset, or accessing a bank account. It can be limited (just related to business needs, not personal accounts) or broad in scope.

Employment Contract

This clearly spells out the terms for employment for any person paid a fair wage for employment. This allows the employer clear terms and standards that can be referred to in case of disputes about hours, responsibilities, or wages promised.

Vendor Contract

This clearly stipulates terms of payment, delivery, standards of quality, and length of commitment. This can be priceless in times of tight cash flow or in busy seasons.

Buy-Sell Agreement

This document should clearly spell out to all shareholders how each event below is to be handled and funded by all interested parties:

• Death
• Disability
• Discontent
• Divorce
• Retirement
• Felony
• Marriage

Operating without these four basic documents is foolish at best and usually to the detriment of the stability of the business. Please remember that the above documents should be drafted by an experienced corporate attorney, not a real estate attorney or family practitioner. Just as a car mechanic should not do the plumbing in your home, you need to use the proper attorney to ensure the ease of dealing with all covered parties in the documents above.

Please also consider these other documents as you are going through this process:

Health Care Directive

The right of a trusted individual to make medical decision on your behalf if you are not capable.

HIPPA Authorization Form

The right of a trusted individual to get copies of medical records medical providers on your behalf.

Will

A document that stipulates the desired distribution of your assets upon your demise.

These three above are not critical but are extremely helpful in unexpected times for your loved ones and your partners’ and employees’ peace of mind.

*All investment advice given by Jeanne Brutman is just opinion. Please consult with your financial professional for a more thorough discussion of what is appropriate for you.