Avoid Legal Issues by Maintaining Proper Corporate Documentation

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Avoid Legal Issues by Maintaining Proper Corporate Documentation

Avoid Legal Issues by Maintaining Proper Corporate Documentation

(Last Updated On: July 24, 2017)

Starting a small business isn’t as easy as it looks.  Apart from the preparations you need to conduct that involve the different aspects of the business like the products, budget, and personnel to name a few, equally important is your readiness on the legal side.

Small businesses are susceptible to legal issues too and if you’re not careful enough, you might find yourself facing HUGE legal problems that could have been avoided if you just did your due diligence in researching and reading all the applicable business laws you can get your hands on.

Sadly, one of the most common mistakes small business owners make is one that should be automatic and one might consider standard procedure already and that is proper documentation.

The Importance of Documentation

We all know that ‘he said she said” is not admissible in court and the best way to get around this problem is to document everything.  But the question now would be, “what part of the business to document?”

Below are some of the most important legal documents you should be maintaining and keeping in case the need for it arises.



Bylaws are basically the lifeblood of your business.  It contains every vital piece of information about how the business should be run.  It’s your rules and regulations.  Your Ten Commandments and it defines what is good and bad basically.

You can expect chaos if you don’t have or keep documented bylaws because this will be the basis for settling any future disputes like the number of votes to approve a decision or the grounds for terminating an employee for example.


Employment Agreements

This document or contract sets the company’s expectations towards an employee with regard to certain aspects of the business like a no-compete clause that disallows your employees from working for a competitor or disclosing confidential information.


NDA (Non-Disclosure Agreement)

Every business has valuable pieces of information that should remain private no matter what and NDA’s are your best line of defense if you want to keep this information out of the public eye.  Financial records, client lists, and new products under development are supposed to be top secret so make sure to let your employees who are exposed to these information to sign an NDA for your company’s protection.


Meeting Minutes

Though it may seem trivial (some don’t even document meetings), meeting minutes can help resolve future disputes especially if something that wasn’t supposed to be done was done and something that was supposed to be done was not done.  This is where the classic “he said she said” and finger-pointing game comes in and this would all be not possible of every meeting minutes are kept and on record.


Privacy Policy

We’re on the internet age and you can practically find almost everything online nowadays which is why it is equally important to post an online privacy policy that documents if you gather any information from your customer or site visitor and how this information will be used (or not).

Documentation, as important as it is, are often neglected or improperly handled until you realize the repercussions.  As a business owner, you need to understand that these are not just solutions to disputes but that they help protect you from possible litigation so be smart and be diligent.

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