Starting a business these days is a fairly simple process. However, establishing your company is much easier when you have all the right documents. These have tons of benefits and protect the interests of the business as long as it’s in operation. Having these documents is essential, as statistics show that 36% to 53% of small businesses are sued annually. Are you considering starting a business and wondering which documents you need to get started with? This article will share some of the top 3 essential legal documents and why they are extremely important to your business and its success:
Employer Identification Number (EIN)
The EIN is a set of unique nine-digit numbers that help when you file your business’s taxes. This number also makes it easier for you to register your business, get a business loan, and open a bank account for your company. Additionally, it reduces your risk of falling victim to identity theft and adds credibility to your business.
Although it’s not compulsory for all businesses, getting one for yours is still smart. It’s not a long process and is free to obtain. If you’re wondering how to get EIN number, you must complete an online application with the correct information about your business. You can choose to receive your EIN immediately via mail or wait at least a month through the mail.
Your business cannot function without policies or guidelines that dictate its operations. No matter how small or large your business is, you must ensure that you have an employee handbook. This document helps your staff know and understand their rights and obligations as employees of your business.
A handbook can also spell out your business’s dos and don’ts. Most states require that business owners inform their workers of their rights. Ensure you have an employee handbook to help you avoid any penalties and lawsuits. A typical handbook is designed to prevent misunderstandings and should cover harassment, benefits, leave, disciplinary actions, safety, equal employment opportunities, and compensation, among many others.
As a business owner, you must take all measures to protect the information that gives you a leg up among your competitors. To ensure that your information is protected and that there’s accountability, you must draw up non-disclosure agreements with your business partners and employees.
Such an agreement will prevent employees or partners from spilling company secrets or any other sensitive information that belongs to the business. Ensure that you put all your confidentiality requirements in writing so that you and the second party know what to expect from each other. Normally, when one party breaches the agreement, they would be held liable for any damages and may have to compensate your business.
It doesn’t matter whether your business is small or large; having the right documents in place will be extremely advantageous. It can also help avoid many problems that cause most new businesses to collapse before entering the industry. Plus, they would protect your business from any lawsuits.