Welcome to Part 2 of the series, and congratulations on settling on an appropriate structure for your new business! It’s now time to start thinking about the key legal documentation you will need to have in order depending on your business’ characteristics.
Firstly, are you thinking of hiring employees?
It is a good idea to have employment contracts in place to protect both yourself and your new employees. A carefully drawn contract will establish the ground rules of your relationship and will aim to protect your business with respect to confidentiality and intellectual property.
An employment contract should be a reflection of the relationship you intend to have with your employees, and the nature of the position you are offering. Factors such as the duration of employment and whether the employee will be on a permanent, part-time or casual basis will need to be carefully considered. Once this has been established, your solicitor can carefully draft a contract that specifies the necessary performance requirements, obligations of confidentiality and leave entitlements (if applicable). Doing so will reduce the risk of a dispute down the track regarding any terms of employment.
Policy and procedure documents:
Further, as an employer, it is equally as important to provide your employees with a clear understanding of your workplace regulations. Clearly defined policies and procedures will not only establish your business’ values as an organisation, but will set expectations of productive employee behaviour. Your policy and procedure documents provide you with an opportunity to assert well-rounded guidelines with respect to areas such as workplace health and safety, anti-discrimination and performance management. In the event any of these guidelines are breached, your policies and procedures will also provide your employees with an effective workplace complaints system.
Do you have agreements in place?
Finally, if you have chosen to go with a partnership or company business structure, you will also need a partnership or shareholders agreement in place.
Partnership agreement
If you are working closely alongside another under a partnership structure, it is important to set out and agree upon the terms of your partnership under a partnership agreement. Although not essential, a well-drafted agreement will work to prevent any misunderstandings, and potential disputes, between partners with respect to business operation. Generally, partnership agreements will cover issues such as how business decisions will be made, dispute resolution, and the rights and obligations of each partner.
Shareholders agreement
A shareholders agreement works in a similar way, clearly defining the rights and obligations of the company’s shareholders and directors. Again, having a well thought out agreement in place from the outset will prevent any misunderstanding on key issues such as obligations of confidence placed on shareholders, dividend distribution and the procedures by which directors can be appointed/replaced. The shareholders agreement will also generally cover what is to take place if a shareholder is permanently disabled, a shareholder passes away, breaches the shareholders agreement and a process that takes place for shares to be sold or transferred in any of these circumstances.
These are just the basics, which is why it’s important to engage an experienced solicitor to ensure your documentation covers all bases.
We can help you in drafting workplace agreements
CPC Lawyers are highly experienced in drafting workplace agreements tailored specifically to your business’ needs. Whether you are starting out fresh or simply require updated documentation, our team are here to assist. Contact us on (08) 7325 0219 to book an appointment.