As a startup, your budget is quite low compared to businesses that can afford costly lawyers to get them highly accurately and legally secured as they have the funds for it.
But as a Startup, these 5 Documents are highly essential, this helps you build trust with your users, letting them know openly, things like how you handle the data, partnering with companies, etc.
But this does not have to be very costly, you can get the same lawyer-level accurate documents, without needing to have any legal knowledge or writing them yourself, at just a fraction of the cost and within minutes.
This is possible with the tools we have today.
With the power of AI, we are able to get these documents at an affordable cost, but also accurately.
Also, Save this post for later.
With that in mind, let’s see the 5 Legal documents that every early-stage startup needs.
1. Founders Agreement
This document is essential when you are starting your startup, and you have co-founders with you in the team.
This document includes details like, their roles and responsibilities, their stock in the company, terms of how they work, etc.
This establishes an understanding between the co-founders, with all the specific details of how they will work.
This protects future issues and sets clear expectations right from the start.
Almost every startup, starts with a founder agreement, just to have an informal understanding to then start working on the startup.
2. Non-Disclosure Agreement
A Non-Disclosure Agreement or an NDA serves to create a legally binding commitment, explaining unauthorized disclosure of confidential information by outlining the consequences of breaches.
You would use an NDA to:
- Promote collaboration between you and other companies by ensuring shared information remains confidential.
- Preventing the loss of a competitive edge by restricting access to sensitive details.
- Clearly defining consequences for breaches, and allowing the offended party to seek relief or legal action.
In short: This acts as a safeguard, for when you want to make a partnership with another company, or a person, but you don't want your confidential information to be leaked to others and you want to have standards for how that data has to be handled securely.
3. Employee or Freelancer Contract
These are hiring agreements, used when hiring an employee or a contractor. This includes the roles, how they have to maintain confidential information, salary, and benefits.
This is mostly known by all businesses and startups.
Here, you can create one document and, as you hire new employees and freelancers, you can just change the name and service provided, and then send it over, rather than creating a new one from scratch.
These are policy agreements, that are essential for startups who have a website or an app.
This is to explain how they handle the user data, terms of refund, how they comply with the data regulations, etc.
If you have a website or an app, this is almost required.
This is how you inform users about how you handle their data, and in some areas, need to comply with certain data regulations, etc. This is how you show that.
5. Employee Share incentive schemes
Employee share incentive schemes are programs that allow employees to own a stake in the company. You can give stocks or shares to your employees.
This can act as a financial incentive to the employees, give them a sense of ownership, and also in some states, act as a tax benefit.
So, if you want to give stocks to your employees, this is the document you need to create.
There are even more documents that a startup would need, if you want to check it out, here it is in more detail: Startup Legal Documents.
But these are the most used and essential documents for early-stage startups, then as time goes on, each startup needs different documents.
Addressing common concerns
How do you create these documents?
For common use cases, like a basic app or website, you can use legal templates, which may be more than enough for your use.
If you were to get it from a lawyer, this would easily cost you over $500 (sometimes even more) and early-stage startups and businesses don’t have that amount of money to spend on a lawyer.
This is why we built Airstrip AI.
This product gives you lawyer-level legal documents for a fraction of the cost and within minutes, built specifically for businesses and startups, with no legal knowledge required, and gives you personalized suggestions with compliance and your business in mind.
If you need help creating the document with our product, here is a post we recently published: https://medium.com/p/fb1b10e17338
You can create all these documents with their Pro Plan which costs just $50/month compared to the $500+ that a lawyer would charge for almost the same result.
You can learn more here: useairstrip.com
Have any questions?
Let me know if you have any questions regarding legal matters of your startup or small business, leave a comment and I will try my best to help you out with them and will be helpful for others as well.
Hope you found this helpful, thanks for your time! 🙏
Disclaimer: The information provided on this website is for general informational purposes only and should not be considered legal advice. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, or suitability of the information. Any reliance you place on such information is strictly at your own risk. We are not liable for any loss or damage resulting from the use of this website or its content.