by Shakeria Northcross, Esq.
3 contracts that small business owners should have:
Operating Agreement
An operating agreement explains how a business will operate. It details ownership interests, management, authorized agents, and more. Operating agreements can include almost anything that the owners want it to include. It serves as a binding agreement between the owners of a business. Some states require businesses to keep an operating agreement in its personal records but generally the agreement does have to be filed with the state.
Operating agreements may be required if your business is sued, requests a loan, or purchases real estate.
Service Agreement
A good service agreement will have sections that establish the agreement’s parties, purpose, expectations, costs, and general terms.
A service agreement helps clients know what to expect while working with you. For example, if you plan parties and have a client who has never worked with someone who plans parties, a service agreement will help that client understand your process for planning a party.
A business owner that does not use service agreements is more likely to have clients allege that they did not receive what they paid for. These types of allegations will cause you to lose money as a business owner because you will not be able to prove "what" you agreed to provide to that client.
Confusion about the type of services that should have been provided can be eliminated with a service agreement.
Nondisclosure Agreement
A nondisclosure agreement protects your business’s confidential information that is shared while doing business with others.
While attempting to grow your business, you share an idea with a company that you want to collaborate with. This company steals your idea and you do not have a nondisclosure agreement that prevents the company from using your idea. It will be hard for you to successfully seek any type of legal action without a nondisclosure agreement.