Every business in this world is a solution to some issues. For instance, all the big companies and corporations provide services and goods. And in return receive profit. This give-and-take relation develops the connection or rights and liabilities of companies too. Interestingly, the legal documents of the companies protect their rights and resolve disputes. So, companies at the formation stage and even later require a plethora of legal documents to communicate their affairs.
It is pertinent to mention, that in the basic or conventional company structure there are several stakeholders who require representation. We see shareholders, investors, subscribers, directors, advertisers, dealers, distributors, etc. Nevertheless, all these participants derive their authority from some type of legal document. This article explains what are the basic types of legal documents that every company must have at the formation stage.
Types of Legal Documents Required
1. Memorandum of Association (MoA)
A document the company needs at the formation stage. It is the deed of the company which shows all the details of the company. This memorandum shows what is the purpose and objective of the company, the status of members, and the total worth of the company. Shortly, it enlists and undertakes what a company can do. The company subsequently cannot refrain from the objectives mentioned. Also, it is a public document and accessible to everyone. The contents include
- The name of the company
- Place of the registered office
- Objectives and purpose
2. Articles of Association (AoA)
Another legal document that defines the internal management of the company. Unlike MoA it is available to employers and employees only. It is the constitution of the company which defines the rules and regulations for the administration purpose. Including how the board of directors works, the duties of managers, how finances are regulated, etc.
3. Partnership/ Shareholders Agreement
The relevant legal document a company needs depends on the type of company. Meaning thereby a founder may have a partner in business or shareholder or both. Importantly, a partner can be a shareholder too. Furthermore, companies may have several partners or shareholders.
Such people come on stage at the formation stage of the company where people join hands to establish a business. Undoubtedly, it requires capital investment. Not everyone invests an equal share necessarily in the formation of the company.
For instance, company X has three shareholders, A, B, and C and the company is limited liability in nature. Shareholder A invests 50%, B adds 30%, C has 20% share and their liability is limited up to respective share. And all these things are mentioned in the agreement. The partnership or shareholder agreements specify the names, rights, obligations, duties, privileges, powers, and functions of the partners or shareholders.
4. Trademarks Registration
The memo of association contains the name of the company and after its formation, the company needs to have that name officially. Such official names require registration. Sometimes the name also has a complementary symbol. The phrase and logo both must not be similar to an already existing company. if you steal the name the other company may sue you.
Similarly, you also need to protect your company name. So, the names are registered at the trademark registration office under the supervision of the Ministry of Commerce and Trade.
5. Intellectual Property Registration Legal Document
After the formation of the company whatever it manufactures or produces-service or goods, they need protection under IP law. For instance, if a company manufactures car engines and hires an engineer for producing them, the property (structure and design) belongs to the company. These are the assets of the company, not the engineer. Hence, the company requires the registration of IP by applying to the relevant office. Following this, the government issues a license to the company.
6. Sale and Purchase of Equipment Legal Agreement
These agreements save both parties to the contract. They define the terms and conditions of selling and purchasing. So, say, a company deals with customers, suppliers, and clients and has different relationships in the context of sale and purchase. To avoid any confusion or legal issue, that arises, these legal documents are necessary.
These documents enlist the contact details, method of payment, limitation of payment, terms, and conditions of return, etc. Furthermore, it also specifies the application of law in the resolution of disputes.
7. Employment Contract
Including all the necessary agreements or memorandums the employment contract is highly necessary for any company. Strictly speaking, this legal document includes the details of the job for the employee. Generally, it includes the pay, working hours/days, holidays, emergency vacation(s), resignation, show cause notice, and other conditions necessary in any employment.
8. Legal Notices
Among all the types of legal documents, a legal notice is probably the most commonly used credential. Not to mention this a legal notice is a show cause notice sent to the adverse party, at the time of the dispute. Mostly, it is sent in case of breach of a contract/agreement or violation of any right.
9. Apostille: a Legal Document
The Hauge Convention provides protection and validity to a legal document of a company in another country too. But the country needs to be a member party of the Hauge Convention. Further, an apostille certifies that a document is authentic and applicable in other states.