A handshake isn’t enough to seal an important deal. Even if it shows how courteous you are as a businessperson, you still need to document your dealings properly. A contract allows you to do just that, whatever situation you are in. Whether you run a start-up or a multinational company, here are the three kinds of agreement your business should have.
Running an organization with someone else is serious business. Even if your partner is your spouse or sibling, it is important to characterize the business in some kind of agreement. Partnership agreements define who contributes what, who gets what, how decisions occur, and how ownership interests happen. It is one of the most important elements of a contract management system since it holds a company’s overall structure. In the event that a partner decides to leave, a partnership agreement can protect your business financially.
Independent Contractor Agreement
Small and large businesses often seek the service of independent contractors, especially for jobs that require a certain expertise. For example, when an insurance company needs a graphic designer for a special campaign, they hire freelancers that work per hour or day. When this occurs, it is wise to have an independent contractor agreement ready. Apart from determining a flexible arrangement, it also lessens company costs by forgoing payroll taxes and employee benefits. This kind of contract makes it clear that the employee is responsible for his or her own levies. An insurance tracking software is also a good investment for any company, VersiTrax notes.
If you are going to share your company’s proprietary information to someone else, you should ask them to sign a non-disclosure agreement or NDA. This confidentiality agreement protects the ideas, procedures, and transactions of your company, as well as your customer list. All businesses should have an NDA ready in the event that a service is immediately required.
Apart from protecting your business from competitors and employee misconduct, contracts also defend you from law-related issues. When building a contract system, it is ideal to invest time and effort to ensure the wholeness of your company.