Contracts for Business Owners

If you have paid attention to any mainstream media news outlet, you may have noticed the last 12-18 months have seemed bleak for small businesses. I don’t agree with their fear mongering and while I personally like to err on the glass-half-full side of things, there was a very brief moment where I wavered and concern started to creep in. However, the resiliency of small business owners has pulled through once again and numbers are on the rise. Below are a few stats for you.

According to an SBA report released in October of 2020, there were 31.7 million small businesses in the United States. 81% of those businesses had zero employees – this does not include contracted laborers. 

In September of this year, Forbes published an article praising small businesses’ resiliency. The article highlighted impressive numbers such as

• Over 5 million new businesses have been started since the beginning of 2021
• The SBA has seen a 41% increase in applications to start a business

While doing research for this post my favorite quote came from the Small Business & Entrepreneurship Council stating, “Small businesses continue to be incubators for innovation and employment growth during the current recovery.” Here, here! 

All in all, small businesses are on the rise and I am here for it!

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So what does that mean for you?

Well, I’m assuming you found this post because you’re interested in starting your own business. Or maybe you’re ready to turn your hobby into a legit, profitable business. Or maybe you already have a business but need a little help in protecting it and yourself. 

Whatever the case may be, you no doubt ran into a lot of information when googling. I don’t want to add to the noise so the rest of this post will be quick links and fun facts for you. My hope is that this post is a reliable resource for you. (Pro Tip: bookmark this link to refer back to when needed.) Let’s dive in…

It’s no secret I’m a huge fan of my lawyer, Paige Hulse, and the contract template shop she co-owns so most of this information is from her education and/or shop. If you decide a contract template is a good fit for your business you can use LINDSAYLUCAS10 at checkout for 10% off your price.

**Disclaimer: By using the above discount code, I’ll receive a small commission on your purchase. As always, I ONLY recommend/promote products and services that either I personally use in my own business or that I’ve vetted for my clients to use in their businesses. Fun fact: Paige and The Contract Shop are the ONLY legal products/services that I’ll ever recommend because I believe in and use them that much.

WHAT CONTRACTS IS MY BUSINESS LEGALLY REQUIRED TO HAVE?

The Multi-Member LLC Operating Agreement or the Single-Member LLC Operating Agreement

If you haven’t set up your business structure yet, you’ll need to choose one of these, not both. If your company will have multiple members then choose the Multi-Member LLC Operating Agreement. Please note: I classified this as required but it is only required if you have NOT set up your business structure yet and if your business will be structured as an LLC. If you’d like to learn more about operating agreements go here.

Privacy Policy

The California Consumer Privacy Act and the GDPR laws state that if your website has or will have a contact form where you collect visitor information such as name, contact information or email address then this is required by law to be linked on your website. A good place for your privacy policy is linked in the footer of your website. 

RESOURCE: The Legal Foundations Ebook

This is packed full of advice on how to legally set up your business the right way. Here are a few things it includes:

• How do you name your business?
• What are EIN’s, and when do you need them?
• Everything you need to know about DBA’s, LLCs, and whether or not you need to be an S-Corp
• Permits, licensing, and insurance
• How to keep your website legal
• What contracts you need, and what needs to be in them
• Trademarks and copyrights 101
• And more!

Client Agreement

As a service based business you’ll want to have a strong relationship with your clients which starts with the contract they sign. Here are a few things your client agreement should include:

• Which package has been chosen, what’s included and what the deliverables are
• How many rounds of revisions are included
• Duration (dates) of the agreement
• Fees of the service package chosen
• Methods of payment accepted and payment terms (initial payment, retainer/deposit, final payment, etc.)
• What happens in the situation of a late payment
• Policies on refunds
• How cancellations or terminations of the agreement would be handled, and policy on an early termination fee
• The type of relationship of the parties (ie. independent contractor, vs an employee)
• What materials and access you the business owner needs from the client to perform your duties, and by when
• Statement that the client accepts if they send deliverables/site content late, the project completion may be late as well
• Who owns the intellectual property and copyright rights after the contractors work is completed
• Agreement that both parties have the ability to share photos of the work for marketing and advertising purposes
• Creative license for you the business owner to perform your services with your specialized skill and talent
• If you the business owner may may be engaged in serving other clients at the same time as the clients project
• How cancellations, terminations, and breaches of agreement would be handled 
• What happens if you the business owner is incapacitated and unable to perform the services
• Standard legal clauses, including: Representations and warranties, confidentiality, limit of liability, dispute resolution, amendments, compliance with law, waiver,  assumption of risk, indemnification, merger, and force majeure

Here are a plethora of client agreements for service based businesses. 

WHAT CONTRACTS ARE RECOMMENDED FOR MY BUSINESS TO HAVE?

Website Terms and Conditions

This is not legally required, but I highly recommend having this contract linked in the footer of your website as well because it governs how visitors are allowed to use content from your site if at all. In other words, it helps to protect you from copycats. If you’d like to learn more I encourage you to read this blog post.

Website Basics Bundle

If you’d like to purchase both the Privacy Policy (legally required) and the Terms and Conditions (highly recommended) then I suggest just purchasing the bundle to make it a little easier. If you’d like to learn more about Terms and Conditions and/or Privacy Policy, you can go here.

Now is a good time to note that there are a couple of different variations for a Terms and Conditions policy. One or all of these might apply to your business.

• Website Terms and Conditions (linked above) is for ALL websites
• Terms and Conditions for Online Sales – You’ll want this if you will be selling physical or digital products
• Terms and Conditions for Online Courses – You’ll want this if you will be selling online courses

MY BUSINESS IS GROWING. WHAT DO I NEED?

Congratulations on leading such a successful business! I’m so happy you’re growing! Here are the agreements I recommend looking into based on your needs:

Legal Foundations of Hiring Ebook

This ebook gives you a solid understanding and groundwork on the topic of hiring so that you can enter this next growth phase of business confidently knowing you’re legally covered. Here’s what it includes:

• The difference between an employee and an independent contractor; why you need to care and how you can know the difference
• Everything you need to know about hiring an intern: paid, unpaid, or externship
• How to (legally) hire a VA, and scary scenarios to protect yourself from
• Proprietary information concerns in the hiring process
• When to bring in an Online Business Manager (OBM) and strategists
• And last but not least – an overview of what our shop attorney wants you to know before you bring on an employee
• And more! 

Employment Agreement

This agreement is intended to use with employees versus independent contractors. If you don’t know the difference then I highly suggest you purchase the above ebook.

Independent Contractor Agreement

Most businesses’ very first hire will be an independent contractor and most business owners have the misconception that because they’re “only” hiring a contractor they don’t need an agreement. FALSE. Even if your independent contractor gives you their own agreement for you to sign, you still need to give them your Independent Contractor Agreement.

Non-Disclosure Agreement (NDA)

I don’t think this one needs much explaining but the one important thing I want to say is it is ALWAYS important to make sure your team members will keep the knowledge and business information you’ve worked so hard for confidential. This agreement ensures that.

Whew! That was a lot. If you’d like to dive deeper into any of the above information, THIS blog post by Paige is gold!