23 List of Business Documents Required to Start a Business
A business cannot function without business documents. A business requires specific List of business documents to buy and sell products, to communicate, to understand how to be more efficient, to manage a business and to operate one. It is safe to say that a business cannot run properly without business documents.
Furthermore, every business should have a system to properly document their business documents. Lack of maintaining the records can delay processes, attract fines and sometimes even cancel a critical deal.
Companies should build sustainable processes that are inclusive of the right documentation. It is imperative to have a repository of documents that can be retrieved from time to time. This, therefore, helps in the effective process of functioning and recording data. The process can be made easier once the documents repository is built and the procedural norms are set around it. Ideally, every company should be having a list of documents that are mandatory for its operations.
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Definition of Business documents
Business documents can be formally defined as “Business Documents means all books, records, files, business records and plans, reports, correspondence, documentation in respect of agreements, and other financial and customer data, whether any such item is in the paper, electronic or other formats, used or held by the Transferring Company in connection with the Transferred Business.”
This means that all contracts, agreements, minutes of meetings, documentation and more are business documents. Businesses often use data and documents to improve their business operations. Every successful business has a system to maintain these records.
Below we’ve Mentioned The Different List of Business Documents That Your Business Should Have.
1. Documentation of Bylaws
As a business owner, you have to deal with a myriad of legal documents. The primary document that you must keep in place is the bylaws of the company.
Bylaws are the laws that the company has established to keep the organisation in control and in regulation. A company’s bylaws are the direct guidance given by the authority of a company. They define the company’s purpose, responsibilities, shareholder obligations and rights, annual board meetings and schedule. It also includes the process of appointment and removal of directors.
It helps design a structure for the business and builds the individual roles for the employees. It helps resolve any dispute that takes places and streamlines the decision-making processes. This document does not need to be filed at the state office, it is for the internal use by a company.
2. Non-Disclosure Agreement
Your business’ first line of defence is the protection of sensitive information. This is what an NDA or a Non-Disclosure Document does. It helps safeguard sensitive information such as financial records, clients, customer details and countless other information that the company deems to be sensitive.
While working with contractors, freelancers and employees Companies need to share confidential information with their employees from time to time. This information is very critical to the company and if leaked could cost a fortune. Companies, therefore, ask employees to handle confidential company information to sign a non-disclosure agreement.
This is one of the List of business documents that legally binds the under signatory to maintain confidentiality, if not they are liable to face legal repercussions
This information is very critical to the company and if leaked could cost a fortune. Companies, therefore, ask employees to handle confidential company information to sign a non-disclosure agreement. The non-disclosure agreement states that the employee will under no condition disclose or make use of the sensitive and important company information with anyone while working with the company.
3. Operating Agreement LLC
An Operating Agreement LLC is a key legal document that is necessary for every LLC with more than 2 or 3 members. Though it is not a legal document, it helps define the process of decision making among key operating authorities. It defines how decisions are made, how meetings are scheduled and the process of admitting new members.
PLC (Private Limited Company) is a key document that defines the basic financial and operational decisions taken by the company. Though it is not a legal requirement, it is important for every LLC with more than 2 or 3 members to have an that is given by Operational Agreement. Furthermore, this is one of the List of business documents that defines the distribution of profits and losses, rights and obligations of a partner and what would happen if someone wants out. Once signed, it is a legally binding contract.
4. Minutes of Meeting
A healthy habit that should be created in an organisation is that of taking minutes of the meeting. This document keeps a written record of the happenings of the meeting as well as serves as “institutional memory”. This legal document includes information about the nature of the meeting, its attendees, discussions, decisions or actions (elections, purchases etc.) taken. This document helps resolve any misunderstanding regarding any occurrence of any past meetings. Moreover, it can also be used for future reference.
Minutes of the meeting captures the happenings of a meeting in detail and used as a referring document for the consecutive meetings. The minutes of meeting documents all the proceedings of a board meeting. It captures inputs like date, time, name of attendees, absentees, the agenda of the meeting, further issues, list of tasks to be performed, next meeting schedule, decisions and suggestions.
5. Employment Agreement
Every employee has certain obligations and expectations that they must fulfil for the organisation and vice versa. This agreement sets the ground rules of the relationship between the organisation and the employee. The culture and the vision of the company can be seen in action in the employee agreement. Though it isn’t a legal requirement to have an employment agreement with every employee, it works as a safeguard for the company if put in place. It is a list of business document that every business should have.
It also plays a role in dispute resolution between the company and the employee in the event of obstruction of expectation of their working relationship.
6. Business plans
A business plan, as the name suggests, is the plan for your business on paper. Before creating a business plan do thorough research, analyze the market, your competitors, understand how you will target the customers in your market. It offers clarity on what your business is, its opportunities and the roadmap that will lead you there.
A business plan encompasses ideas and strategies in a certain framework such that they can be easily presented and appear structured. A business plan includes the executive summary, company information, product/service information, swot analysis, department wise sub-plans, budget, milestones and critical measures.
It may not be a legal document but is required to be presented to future investors. should you take the route of seeking external funding?
7. Business Reports
Business reports are facts and figures about certain departments. It includes aspects of your business that exist as company data, which, after analysis can derive outcomes and projections. Business reports cover an issue at hand and make use of extensive data analysis to project solutions.
A business report typically gives data like sales figures, marketing plans, the number of employees, teams, details about the founders, feasibility reports, safety compliance and more.
This is the business document that comes in handy when pitching to new investors onboard or simply reviewing your company’s progress. It is also advisable to keep a template ready for the same. Furthermore, reports are used to evaluate risks and offer workable recommendations.
8. Financial Agreement
As a business owner, you must have a strong grasp of your company’s finances. It is important to know whether you are within budget, making profits or spiralling losses. A financial report identifies that. It assists in determining whether a department has been productive or not, it also helps understand a broad review of the company’s performance annually. These reports help you in filing taxes or budget proposals. Below are some important financial business documents that every company should have.
1. P&L (Profit & Loss)
P&L is the Companies Profit & Loss statement, projecting revenue and expenses. Companies have to prepare the statement for accounting purposes as well as for sharing with shareholders.
2. Balance sheet
A balance sheet is a statement that documents the company’s assets and liabilities. The investors, creditors and shareholders of a company usually refer to the Balance sheets. They are prepared at the end of the financial year. It is a document that helps analyse the company’s growth trajectory.
Projections are the forecasts based on internal and external accounting data. The expenses, revenues and the overall growth of the business depend upon the projections.
4. Bank Statement
A bank statement is the official summary of the official bank transactions that occur in every bank account of the company in a given period of time. This gives an understanding of the total transactions in a company and the total income or expense.
5. Payroll Reports
A payroll report is submitted to the government to inform them about the employment tax liability. It contains the details of the payroll of every employee in the company.
9. Transactional Documents
One of the key factors in keeping your company’s financial statements organised is through the maintenance of transactional documents. These business documents include receipts, invoices, order forms, transmittal pages, etc. Having these documents also works as a proof in case legal issues prop up in the future. Therefore, it is important to keep them safe.
Some companies go further and hire accountants to manage the company’s finances and draw up reports.
10. Business Insurance
Businesses are prone to risks all the time and having business insurance gives you the safety net for the same. Business insurance ideally covers different insurance to keep it sailing through natural disasters, catastrophes, sabotages, the business loses, death/accident of the partner or owner, theft or other damage etc.
Therefore, it is important to have a file designated to hold the document pertaining to it. Some insurers may cover natural disasters, while some only cover vandalism, theft, fires and wind damage. It is wise to buy separate insurances if one doesn’t give coverage against all.
Furthermore, business insurance is ideal for start–ups as they are at risk of bad management, lawsuit cover, copyright issues, natural disasters and unexpected events in the company.
11. Partnership Agreement
A partnership agreement is a contract between two or more individuals starting a business entity, has decided to share the profit and losses. The partnership agreement is a business document that outlines the obligations, legal and operational, debt liability and profit-sharing as well as individual responsibilities of the parties involved.
The agreement essentially keeps all the partners in tandem to the agreed terms of working without any deviation and disagreements.
12. Co-founder Agreement
The Co-founder agreement is prepared across more than one founder and highlights the rules and obligations and share of each of the partners. It also includes the company’s goals, values, philosophies, and culture. Meanwhile, this agreement can also be constructed as a part of capital contributions, budgets and allocation.
13. Business Pitch Deck
New companies should create a powerful and insightful pitch deck that will essentially capture the essence of the company. A pitch deck is usually presented to clients, shareholder or venture capitalists. Additionally, the pitch deck should involve – introduction, team, problems, advantages, solutions, products, market speculations, competition, business model, investments requirement and contact.
List of Business Documents Pitch Deck
1. Startup Pitch Deck Template
2. E-Commerce Pitch Deck Template
3. Corporate Pitch Deck Template
4. Business Plan Pitch Deck Template
5. Advertising Pitch Deck Template
6. Agency Pitch Deck Template
7. Sales Pitch Deck Template
8. Product Presentation Template
9. Project Proposal Presentation Template
10. Fundraising Presentation Template
14. Investor Agreement
Investments are critical to companies along with their different growth phases. An investor agreement is prepared for documenting subscription of shares against the investments done. The investment agreement defines the terms of investments, investment amount, parties involved, the dividends and the returns offered. The agreement comes as a security measure guarding the investor’s interest in the company with the timely assurance of return on investments.
15. Board Resolutions
Board Resolutions are decisions taken in a board meeting and form a part of the documentation for further reference. Therefore, board resolutions can affect the company in several cases. For example by appointing a new member to the board, expanding the company, resource allocation, selling company shares, or other major decisions that can affect the company. The board resolution is subject to documentation process after a unanimous decision by the board of members.
List of Board of Resolution Documents
1. Board Resolution For Change In Name Of The Company
2. Board Resolution For Closing Of A Bank Account
3. Board Resolution For Opening Of A Company Bank Account
4. Board Resolution Of To Provide A Loan
5. Board Resolution Of Approving A Sale Agreement
6. Board Resolution Of Approving Subdivision Of Issued Shares
7. Board Resolution Of Approving The Sale Of Shares
16. ESOPs Agreement
Employee stock option plans, also known as ESOPsare the stocks offered by a company to its employees at a discounted price. ESOPs are provided to employees to retain them in the company for long. ESOPs agreement includes a number of shares allotted, name of the employee, strike price, date, vesting schedule and maturity.
17. Accounting Agreement
Accounting agreement is a document of mutual understanding between the bookkeeper and the company, discussing services and arrangements. Likewise, this agreement is also known as bookkeeper agreement and can be used as a one-time or retainer basis.
Accounting agreement usually involves the name of the company and bookkeeper, date of the agreement, duration of the agreement, services offered, compensation decided and confidentiality agreement.
18. Franchise Agreement
A franchise is sourcing your business operations on the franchiser’s terms and these terms are standard across all franchise and documented and signed under an agreement. The franchise agreement is a mutual written contract between the franchiser and the individual who wants to enter the franchise agreement. The franchise agreement is one of the List of business documents that your business can use to expand the business.
Likewise, the agreement states the terms of working, compensatory details, standard branding practices, duration of the agreement, sight selection and development, operational support, insurance and accounting standards etc.
Trademark is intellectual property documents and distinguish your company or brand from the others in the market. It could be a sign, phrase or symbol that is associated with a product, brand, service or company. The unique property of a trademark makes it sensitive to intellectual property rights. Trademarks draw legal implications if copied or reproduced illegally or without consent. The trademark is one of the List of business documents that your business should have.
20. Compliance Document
Many organisational processes have to adhere to certain set standards and thus come under the category of compliance documents. The compliance documentation is a set of agreements, reports, registrations, renewals and also other crucial documents that are important in the event of an inquiry seeking compliance verification.
Memorandum of Association (MOA) is drawn between a company and its shareholders. This is a rule book that defines the working of the company as well as shareholder rights and contribution. In addition, the MOA defines the rights and privileges of the company. MOA offers a fair idea of the working of a company, making it beneficial to the creditors and shareholders, to arrive at necessary inferences.
Articles of Association is a critical document that lists the guidelines and by-laws that together help in running a company. It is essentially the management that defines the articles of the association including the shares trajectory, appointing and removing directors, powers to the directors, board meeting schedule and notices. In addition, it also includes borrowings, the procedure for wind-up, accounts and audits, revenues and dividends etc.
Certificate of Incorporation
Certificate of incorporation is a process that registers the company under the Companies Act making it an operating entity. The certification of incorporation is further handy in creating different documents including creating a bank account for the company. The certificate of incorporation is a legal document that proves a company exists. Additionally, the document primarily lists the company name and the date of incorporation among the other details.
The GST Certificate (Goods and Service Tax) is a tax levied to companies for selling their products in the domestic market. It came to replace the existing tax format and therefore a mandatory process and document. The GST certificate bears the GST number that is useful in a company’s sales transactions.
The GST number also facilitates remittance of the advance tax taken by the government. Moreover, It also comes handy in client transactions. Furthermore, the GST certificate is a critical document and needs to be renewed regularly.
Adequate Business License
Businesses need a plethora of licences for running smooth. These could be region-based license, or state-based or specific country permits. Every license comes with its set of terms and obligations and needs to be procured as well as renewed from time to time for the effective functioning of the business. A thorough listing of all the licences your business requires could be handy in defining further processes.
21. Agreement with Vendors
Additionally, a renewal process for all the documents should be part of documentation and necessary reminders should be set to avoid missing out on any business opportunity.
22. Client Agreement
A client agreement is a crucial document that states the service you are providing to your clients. It also lists the terms of payment, dispute resolution, liabilities and termination clauses. Furthermore, the client agreement essentially defines the code of conduct and the expectations of both the parties involved. The client agreement is a legal business document that can be referred to bring clarity when one or both parties are deviating from the set and agreed on standards.
23. Company Policy
Company policy is a rule book that defines the working around the legal, operational, functional and client-facing parameters. The policies are worked around health, safety, employee conduct, statutory policies, salary & compensation, workplace policies, substance abuse, disciplinary and legalities etc.
Policies are guidelines that create a backbone a company can rely on. Company policy is an easy reference manual around different situations, obligations, norms, issues and requirements. This is also one of the business documents that your company should have. It will help resolve tricky situations easily.
Similarly, as the company grows the above set of documents are much needed and handy for every organisation. It is imperative to do an audit on these documents and know of the recent compliance requirements.
Additionally, a renewal process for all the documents needs to be noted and carried out to avoid missing out on any business opportunity.
In conclusion, the smart businesses work pro-active and are resilient to changing trends. This happens only when the business is backed by the right documentation and processes
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