The Essential Legal Contracts for Entrepreneurs: A Complete Guide

1.) Partner or Co-Founder Contract:

If you are starting a company with other partners, a partner or co-founder contract is crucial to establish clear roles, responsibilities and shareholdings.

A Shareholders Agreement (also known as a SHA) is a legal contract used in companies with multiple partners or shareholders to establish the rights, obligations and relationships between the owners of the company. This agreement is especially important in small businesses or startups, as it defines how the business will be managed and operated, as well as how disagreements between partners will be resolved.

The minimum content of a Shareholders Agreement may vary according to the specific needs of the company and its partners, but should generally contain the following key elements:

1. Identification of the parties: This should include the names and identification details of all partners or shareholders who are party to the agreement.
2. Shareholding: This should specify the number of shares or interest in the company held by each partner, as well as any provisions related to the purchase or sale of shares.
3. Rights and duties of partners: It should detail the rights and obligations of each partner, including their role in the management of the company, important decisions and financial contributions.
4. Decision-making: It should set out how important decisions will be made within the company, including majorities required for significant changes and procedures for resolving disagreements.
5. Profit distribution: It should define how profits and losses are to be distributed among the shareholders, as well as the procedures for the distribution of dividends.
6. Purchase and sale of shares: It should address how share purchase and sale transactions between partners will be carried out and how the price of shares in such transactions will be determined.
7. Right of First Refusal: May include a provision giving other shareholders the right to match any offer to buy shares from another shareholder before the shares are sold to a third party.
8. Drag-Along Rights: This can include a clause allowing a majority of shareholders to force the others to sell their shares in the event of a takeover bid for the company.
9. Exit clauses: You should consider exit scenarios, such as the sale of the company, and how profits will be shared in such situations.
10. Dispute resolution: Should include a mechanism for resolving disagreements between partners, which could include mediation or arbitration.
11. Confidentiality and non-competition: May contain provisions relating to the confidentiality of company information and restrictions on competition between partners.
12. Duration and termination: You must specify the duration of the agreement and the circumstances under which it may be terminated.

The specific content may vary according to the nature and needs of the company, and is usually drafted by a lawyer specialised in corporate law. A Shareholders Agreement is essential to prevent conflicts between partners and to provide a solid framework for decision-making and management of the company.

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Non-competition and permanency agreement

Non-competition and permanency agreement is obligatory in every contract that regulates a transaction. The details of each are described here.

2.) Employment Contract:

This contract defines the terms and conditions of employment for you and your employees, including wages, working hours and responsibilities.

3.) Professional Services Contract:

If you engage professional services, such as consultants or freelancers, this contract sets out the terms of the agreement, including fees and deadlines.

4.) Confidentiality Agreement (NDA):

An NDA protects your company’s confidential information by prohibiting unauthorised disclosure by third parties.

5.) Commercial Lease Agreement:

If you rent space for your business, this contract regulates the terms of the lease, including rent and terms.

6.) Intellectual Property Licence Agreement:

If you offer products or services based on intellectual property, such as software or designs, this contract regulates the licence of use.

7.) Client Contract:

This contract sets out the terms of the relationship with your customers, including deliverables, prices and payment terms.

8.) Investment Contract:

If you are looking for investors, an investment contract sets out the terms of the investment, shareholding and financial expectations.

9.) Termination Agreement:

This agreement describes how contracts can be terminated in case of default or for other reasons.

10.) Contract of Sale and Purchase:

If you sell products, this contract regulates the purchase and sale of goods, including warranties and delivery times.

The minimum content of an SPA (Sale and Purchase Agreement) may vary depending on the nature of the transaction and the specific needs of the parties involved. However, the following is the minimum content that is generally included in an SPA:

• Identification of the parties: This should include the names and identification details of the parties involved in the transaction, i.e. the seller and the buyer.
• Description of the transaction: It should clearly specify which assets or shares are being sold, including a detailed description of the assets or shares.
• Purchase price: You should set out the agreed price for the sale, as well as the terms of payment, including terms and conditions.
• Representations and warranties: The seller must make representations and warranties about the assets or shares being sold. This may include details about the ownership, condition and other aspects related to the assets.
• Representations by the parties: The parties may include statements confirming that there is no hidden information or outstanding legal issues related to the transaction.
• Condition precedent clauses: Conditions can be set that must be met before the transaction closes, such as obtaining regulatory or financial approvals.
• Closing date: The date on which the transaction will take place should be established, as well as the procedures necessary for closing.
• Transfer of ownership: Describe how ownership of assets or shares will be transferred, including delivery of documents and physical delivery of assets if applicable.
• Indemnity statement: This may include provisions for indemnification in the event of a breach of any of the representations and warranties set out in the agreement.
• Expenses: You should specify who will bear the costs related to the transaction, such as legal and audit costs.
• Governing law and jurisdiction: You must indicate the law that will govern the agreement and the jurisdiction in which any legal dispute will be resolved.
• Confidentiality terms: May include provisions requiring the parties to keep the transaction and related information confidential.
• Non-compete terms: May include restrictions on future competitive activities by the seller.
• Non-disclosure terms: May include provisions prohibiting disclosure of transaction details to third parties.
• Signatures and witnesses: It should include space for the signatures of all parties involved, as well as witnesses, if necessary.

It is important to note that the content and complexity of an SPA can vary significantly depending on the transaction, the industry and the parties involved. Therefore, it is common for a lawyer specialising in commercial transactions to be involved in the drafting and negotiation of the SPA to ensure that the interests and needs of all parties are adequately addressed.

It is important to customise these contracts to the specific needs of your venture and seek legal advice to ensure that they are properly drafted and comply with local laws. Consultation with a lawyer specialising in startups is highly recommended.

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