If you are just starting a new business in Australia, sometimes its difficult to know what you need to set up the basic fundamentals of a company. We explain the most important documents which are used to create a business in almost any field.
1. Company Incorporation Documents
Invariably, setting up a business means considering a company structure for the business. The privately held corporation in Australia is the most common method of incorporation for small business and has a number of advantages. To incorporate a business you need some basic things like director consents, the initial register of shareholdings and you can chose to incorporate the company using its own bylaws although the standard ones in Corporations Act 2001 (Cth) are adopted by default as what are called the replaceable rules.
2. Company record keeping documents
In most companies, as a minimum, it is necessary to hold annual general meetings and minutes need to be kept of the meetings. Usually it is necessary to produce annual accounts and audited financial statements. If the company is of any substantial size (usually annual revenue of more than $25million) it is a legal requirement that audited financial statements are produced. Meeting minutes can also serve as an aid to resolving disputes if they arise between directors and/or shareholders.
3. Shareholder Agreements
A shareholder agreement sets out the rights and obligations of shareholders in relation to their shares and in many cases defines access to management positions in the company and the terms of corporate control of the company, particularly where it is a small business. The agreement defines how profits and losses are distributed and often contains buy out provisions if someone wants to leave the business.
4. Non-disclosure agreement
Invariably, the information generated by a business like customer records, financial records, pricing strategies and the proprietary technology of the company are immensely valuable and often need legal protection. The non-disclosure agreement is a method of applying a legal umbrella of protection to a business to prevent the unauthorised disclosure of information about the business.
5. Employment Agreements
Being in business means working with people and employment contracts set out the rights and obligations of employees of the business in relation to the business. Having an employment agreement often assists with protecting the confidential information of the business. It defines and sets out the most basic rights and benefits of the employee. In any business which is more than a few people, well drafted employment agreements are an essential part of structuring the business effectively.
6. Business Plan
Although not a legal document, a business plan sets out the objectives of the business and a strategy for achieving those objectives. It is essentially a statement of where the business is going and how to get there. Business planning is often underestimated for its effectiveness.
The internet allows you to rapidly gather customer data and share content instantly with anyone in the world. Internet users have a legally recognised right to privacy and you need to explain on your website how you handle customer information.
As so much of business crosses international borders these days, anyone transacting with overseas customers or suppliers will at some point encounter the need for legalisation certificates for use in other Hague Convention countries, known as an “apostille,” that authenticates the origin of a public document (like articles of incorporation) so they can be recognized in another country.
If you have questions about any of the above documents or you are looking into starting a business, we can provide you with legal advice on the formation of the business and all of the relevant documentation referred to above and more. Get in contact with us to find out more.