Assuming you are setting up a limited company you really do need a shareholders’ agreement. This regulates the arrangements between you and your fellow shareholders. If there are other founders you need to agree and write down who owns the shares, and in what amounts. You also need to set out a framework for operating the company – who can make decisions and how do they get made. Don’t assume that just because everything is okay at the beginning, or you are all friends, that it’s going to be fine later. Remember how many bands have got into arguments when they split up, because there wasn’t an agreement saying who owned what. Remember how many rows there have been among songwriters who didn’t agree on the splits between them for that hit they wrote? Exactly. If you want your company to sound like sweet music then get this basic formality right…
Click here to download our Shareholder Agreement.
If somebody is investing or loaning money to your company they will want to see the terms written down. They will want to know what shares they get and what their value is, will they get diluted if more money comes in, procedures for running the company and exit, how much control they get. These issues are directly relevant to you as the entrepreneur too. Don’t just sign whatever is put in front of you. If you don’t pay attention to these details they will come back and bite you later.
Click here to download our Share Investment Agreement.
Website T’s and C’s
If you are running a website you need a collection of documents covering the way that the website is run. Consumers need to see these. Sometimes there are legal reasons, as with your policies on Data, or privacy, Cookies or cancellation policy. Sometimes it’s just good to set an expectation as to how you are going to behave and how you expect your customers to behave. Don’t just copy and paste someone else’s T’s and C’s. For example, Apple’s T’s and C’s may work well for a major global technology company, but they may not be appropriate at all for your small business. Take the time to create your own T’s and C’s which reflect the way that your business runs.
Click here to download our Terms and Conditions of Website Use.
If you are asking software developers to develop apps or websites or platforms for you then you must write things down. Some people say that software developers are the new builders – just like the people who make alterations to your house they are always running late, always going over budget and whatever happens it’s never their fault – they just blind you with construction science. Sound familiar? I would never be that unkind or simplistic about developers but it’s certainly the case that confusion and frustration can break out on all sides when there is no contract in place. What’s the price? When will it be paid? What are the development milestones? Who will own the software? Who will deal with bugs, changes and maintenance and at what cost? Your software may be a core component of your business – so it’s worth getting the paperwork right.
Click here to download our Software Development Agreement.
Employment or Consulting Agreement
Do you have people working with you? You need to write down the way that you are working with them. Employees now have a host of potential legal protections, e.g. in relation to process around termination, their data, disciplinary matters, and their pension rights. So you need to address that and other obligations in writing. And don’t assume that just because you call someone a “Consultant” in order to avoid all that stuff then that is what they are. The law and the taxman may still class them as an employee if effectively they are working full time only for you. Apart from these considerations you just need to be clear on the terms on which people work for and with you. What are they paid, when? Is there a bonus? How is it calculated? What hours of work do you expect? Do they get sick pay? What happens with holidays? If they leave what happens to their shares? And so on…
Click here to view our Employment Agreements.
Contract Partner Agreements
This next one is cheating a bit because contract partner agreements can take many forms. It may be a manufacturing agreement, distribution, e commerce, drop ship, agency or licensing agreement. Whoever you trade with you need a commercial contract that governs issues like price, payment terms, delivery standards for services and products, timetables, responsibilities, exclusivity, termination and so on. Without your customers and your cash you are nothing, so take the trouble to write it all down to give yourself some protection and peace of mind.
Click here to view our Partnership Agreements.
Your ideas, copyrights, patents, software and financial information are your private DNA. They make you unique and could help deliver unique value for you. But they could be cloned by someone else if you do not keep them secret. Other people like prospective investors, trade partners and purchasers often need to find out something more about you before they will deal with you – an NDA offers you some protection in relation to the information you disclose. You may not ever want to go through a court case to enforce it, but having a signed NDA is an expression of intent by both parties and a deterrent against disclosure of confidential information.
Click here to view our Confidentiality Agreements.
So those are the 7 types of agreement which all SMEs should be considering. You can find all of these legal documents on the Legal Documents page.