What are All Documents are Required to Start a Business in the US?

Last Updated at: January 07, 2020
258
What all documents are required to start a business in the US_

The process of starting a business in the U.S. is made much simpler these days. One can start his business in the U.S. even if he does not have a valid visa and is not planning to come to the U.S. any time soon. However, you should take care to have a few basic legal documents in place to ensure the success of your business. Documents play a crucial role to protect your business interests throughout your business in the U.S. Here, we will discuss some of the most common documents for setting up a US business.

Know more about the benefits of registering your business in the U.S.

  1. Business plan

It is not a legal document but is extremely important if you want to seek investment for your business. Your business plan will provide clarity about the objective of your business and its roadmap to achieve the same. It also informs the potential investors about-

  • Who manages the business
  • The products and services of your firm
  • The sales and marketing strategy
  • Your target market segment and the opportunities and risks associated herein
  • How the products/services will be delivered to the customers
  1. General partnership agreement

Sometimes you may stitch a partnership with someone to share the start-up cost and other responsibilities. The general partnership agreement will help all the partners to understand and abide by the terms of the partnership and also to avoid possible legal disputes in the future. It should contain information such as-

  • The names of the partners involved
  • Partnership duration
  • The contributions of each partner in terms of land, money or business equipment
  • The division of authority and labour
  • The procedure to add new partners, if required
  • How to deal with certain events such as the death or departure of a partner

register your business in the USA

  1. LLC operating agreement

Registering as an LLC is ideal for high-risk businesses as you will not be held personally liable for any debts accumulated by your business. We recommend an operating agreement for every LLC that involves multiple members. Once all the members sign this agreement, it becomes a binding contract for them.  Also, if you file the articles of organization and do not operate your LLC with an agreement, you may attract civil penalties in case someone sues you or during an IRS audit. The operating agreement specifies-

  • The members who own the LLC
  • The functional and financial decisions binding on the members
  • The distribution of profits and losses among the members
  • How the key business decisions will be arrived at
  • The obligations and rights of the members
  • How the LLC would be taxed
  1. Bylaws and meeting minutes for Corporations

Most states in the U.S. require you to maintain a record of bylaws in case you decide to set up a corporation. Bylaws specify-

  • How the corporation will govern itself
  • The structure of your business
  • Roles of individuals
  • How to settle issues/disputes related to governance

Meetings minutes are also required by many U.S. states. These minutes need to be detailed enough so that they can serve as the ‘institutional memory” of your company. They should typically include-

  • Type of meeting
  • Place and time of the meeting
  • Details of attendance
  • Actions/decisions taken(elections, purchases etc)
  • Details of voting, if any, along with details of absentees
  1. Employment agreement

This is an important document that describes the expectations and obligations of the employees and the company to minimize disputes/conflicts in the future. This is more of a contract that will dissuade your employees to leave your organization too soon, disclose confidential business information or misuse company properties.  This agreement creates a solid foundation and a formal relationship between the employee and the employer and also provides a sense of security and stability to both the parties. It includes some important aspects related to employment such as-

  • Terms of general employment
  • Wages, benefits and other compensation
  • Duties and responsibilities of the employees
  • Positions
  • Working hours
  • Non-compete and non-solicit clauses
  • Confidentiality clause to protect trade secrets and copyrights
  • Notice period and termination

Learn more on how to start a business in the U.S.

  1. Privacy policy and terms of service

These are two of the most common legal documents prepared by any firm these days. The privacy policy informs a user about how the business will use the information/data received from him whenever he uses the company website/mobile application. Similarly, the terms of service policy is a set of terms the user needs to adhere to whenever he uses the business website/mobile application. There are three fundamental reasons as to why you require these two documents in place-

  • To facilitate online payments
  • To ensure security in business operations
  • And to establish trust with the customers and make them comfortable

The footnote:

Having the right documents in place will help you to avoid issues/disputes/expensive lawsuits in the future. It will also enable you to comply with the State and Federal regulations quite easily.

To know more about USA INC: Click here

You should also read:

What are All Documents are Required to Start a Business in the US?

258

The process of starting a business in the U.S. is made much simpler these days. One can start his business in the U.S. even if he does not have a valid visa and is not planning to come to the U.S. any time soon. However, you should take care to have a few basic legal documents in place to ensure the success of your business. Documents play a crucial role to protect your business interests throughout your business in the U.S. Here, we will discuss some of the most common documents for setting up a US business.

Know more about the benefits of registering your business in the U.S.

  1. Business plan

It is not a legal document but is extremely important if you want to seek investment for your business. Your business plan will provide clarity about the objective of your business and its roadmap to achieve the same. It also informs the potential investors about-

  • Who manages the business
  • The products and services of your firm
  • The sales and marketing strategy
  • Your target market segment and the opportunities and risks associated herein
  • How the products/services will be delivered to the customers
  1. General partnership agreement

Sometimes you may stitch a partnership with someone to share the start-up cost and other responsibilities. The general partnership agreement will help all the partners to understand and abide by the terms of the partnership and also to avoid possible legal disputes in the future. It should contain information such as-

  • The names of the partners involved
  • Partnership duration
  • The contributions of each partner in terms of land, money or business equipment
  • The division of authority and labour
  • The procedure to add new partners, if required
  • How to deal with certain events such as the death or departure of a partner

register your business in the USA

  1. LLC operating agreement

Registering as an LLC is ideal for high-risk businesses as you will not be held personally liable for any debts accumulated by your business. We recommend an operating agreement for every LLC that involves multiple members. Once all the members sign this agreement, it becomes a binding contract for them.  Also, if you file the articles of organization and do not operate your LLC with an agreement, you may attract civil penalties in case someone sues you or during an IRS audit. The operating agreement specifies-

  • The members who own the LLC
  • The functional and financial decisions binding on the members
  • The distribution of profits and losses among the members
  • How the key business decisions will be arrived at
  • The obligations and rights of the members
  • How the LLC would be taxed
  1. Bylaws and meeting minutes for Corporations

Most states in the U.S. require you to maintain a record of bylaws in case you decide to set up a corporation. Bylaws specify-

  • How the corporation will govern itself
  • The structure of your business
  • Roles of individuals
  • How to settle issues/disputes related to governance

Meetings minutes are also required by many U.S. states. These minutes need to be detailed enough so that they can serve as the ‘institutional memory” of your company. They should typically include-

  • Type of meeting
  • Place and time of the meeting
  • Details of attendance
  • Actions/decisions taken(elections, purchases etc)
  • Details of voting, if any, along with details of absentees
  1. Employment agreement

This is an important document that describes the expectations and obligations of the employees and the company to minimize disputes/conflicts in the future. This is more of a contract that will dissuade your employees to leave your organization too soon, disclose confidential business information or misuse company properties.  This agreement creates a solid foundation and a formal relationship between the employee and the employer and also provides a sense of security and stability to both the parties. It includes some important aspects related to employment such as-

  • Terms of general employment
  • Wages, benefits and other compensation
  • Duties and responsibilities of the employees
  • Positions
  • Working hours
  • Non-compete and non-solicit clauses
  • Confidentiality clause to protect trade secrets and copyrights
  • Notice period and termination

Learn more on how to start a business in the U.S.

  1. Privacy policy and terms of service

These are two of the most common legal documents prepared by any firm these days. The privacy policy informs a user about how the business will use the information/data received from him whenever he uses the company website/mobile application. Similarly, the terms of service policy is a set of terms the user needs to adhere to whenever he uses the business website/mobile application. There are three fundamental reasons as to why you require these two documents in place-

  • To facilitate online payments
  • To ensure security in business operations
  • And to establish trust with the customers and make them comfortable

The footnote:

Having the right documents in place will help you to avoid issues/disputes/expensive lawsuits in the future. It will also enable you to comply with the State and Federal regulations quite easily.

To know more about USA INC: Click here

You should also read:

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Senior Executive - Content in Vakilsearch | Former TEDxSKCET Licensee | Content Marketing | Psychology | Engineering (IT) | Google Developers Group (GDG) co-organizer | WTM Ambassador