When setting up or maintaining a business, there are many degrees of compliance and regulatory standards that need to be met. For many new businesses, it may seem easy to establish themselves. However, any business activity requires a great deal of administrative paperwork and oversight. There are several legal documents that can help you establish your new business, ensuring it is on the right track and that your employees have established policies and procedures.
All these legal documents are vital to establishing a business and keeping it operational. There are several necessary documents that business owners should be familiar with.
Business Plan
While this isn’t a legal document, it is a way to establish financing for your company. A business plan is created prior to the start of a company to ensure that its goals, resources, strategies, and mission are aligned to provide direction for the organization. Business plans set you apart from your competition by outlining the needs and opportunities your business will provide.
Doing Business As (DBA)
When a company establishes itself, the legal name and the operating name may differ. When this happens, they may use a DBA. This differentiates an organization’s legal name from the name that they wish for their customers to use when referring to it. However, DBAs often still let the public know who the operator of the business is. Many companies that file a DBA are subject to oversight by the public in case there is unscrupulous behavior.
Partnership Agreement
Partnership agreements are used when two or more people own a joint stake in the running of a company. These agreements help to establish how much each entity owns and determine how much debt or liability each party is responsible for. In addition to shared financial responsibility, this also establishes how much responsibility each party has for the day-to-day operations of the company.
Incorporation Documents
These documents are a key foundational element for any business owner. In addition to establishing how a business will run, it also lays the foundation for the procedures under which each of its employees will function. When starting a business, these documents need to be established for the company to continue to grow and develop. Common forms of incorporation documents include:
- Articles of Incorporation: Each company needs to establish its foundational practices, beliefs, and policies. To do so, they will need to file their articles of incorporation. These filings are registered with the Secretary of State. Under these filings, companies are obligated to function under the legal precedent set by the industry for which they file.
- Bylaws: Bylaws are the standards by which an organization will govern itself. These set the legal precedent that all parties under the umbrella of the organization must follow. Bylaws:
- Determine the number of board members.
- Designate the power structure of the organization.
- Host and welcome a public committee in the community.
These also establish how the leadership structure is formed within the organization and who should be involved in that process.
- Meeting Minutes: If your business is a corporation, you are required to hold meetings, which are conducted by a board of advisors. During these meetings, it is required that you take minutes of the discussions as well as the time, location, and list of attendees that were present. These meetings may seem trivial, but they are important in terms of purchasing, elections, and more.
LLC Articles of Organization
Many business owners choose to file their companies as LLCs because it allows them greater flexibility in certain elements of their enterprises and less liability should something go wrong. Under an LLC, businesses will file Articles of Organization, which outline the roles and responsibilities of those within the organization.
Foreign Qualification
If a business seeks to incorporate in a different state or country, they must file a foreign qualification for the location in which they conduct business. This is essential for businesses that wish to expand beyond their home state.
Business Licenses and Permits
The industry in which a business operates may require certain permits or policies that help them determine the ways in which the city, county, state, or federal government requires them to run. These types of permits could be as simple as street lighting and security or as complex as federal licensing and policies. No matter your business, understanding the requirements can prevent future issues and penalties.
FAQs
Q: What Are Legal Documents in Business?
A: Legal documents can vary from articles of incorporation that start a business to tax documentation and contracts. Each type of document helps ensure that a business is establishing itself or running in a manner appropriate for the industry in which it is operating. If they are not, they push for change to keep the business moving forward.
Q: What Documents Are Needed for a Business?
A: Businesses need several types of documents, some of which must be replicated or replaced if lost or stolen. Common documents include:
- Business plans
- Sales and license tax
- Federal tax ID
- Confidentiality agreements
These documents, along with additional resources, are there to establish the business’ foundations.
Q: Do I Need to Register My Business in California?
A: Each business in California must file a registration with the state government to conduct operations in the state. The registration protects organizations from unauthorized duplication. In addition, it sets the taxation parameters that they must follow to stay compliant with the state and federal governments. A business lawyer can help you understand this process.
Q: What Are the Five Most Common Types of Business Documents?
A: The five most common types of business documents include:
- Profit and loss statements
- Balance sheets
- Cash-flow statements
- Tax returns
- Aging reports
These documents speak to the success of the company. The government requires these filings to ensure that the company is operating under the law.
California Business Attorney
Companies in California require great amounts of paperwork to keep them functional and profitable. If you have a company, or are seeking to start one, and want to ensure your company is following state and federal regulations and guidelines, contact Fishman, Larsen & Callister today.