Key Contracts in a Startup Business

Your startup business may begin with only you or another co-founder but it is never too early ensure the successful progression of your startup from a legal perspective. Many successful startups scale quickly so it is essential to establish a framework to comply with the Australian law right from the start to ensure that your business is protected.

In this article, we highlight 3 key contracts to have and why they are necessary to help support your growing business.

1. Shareholder/ Partnership Agreement

Depending on how your startup is organised, it's crucial to have a shareholder's agreement for a company or a partnership agreement for a partnership. These documents are essential for outlining the interests of all equity owners or co-founders. They not only document each owner's equity and initial contributions to the startup but also establish the rules and boundaries that govern the relationships among the owners.

2. Employment/ Contractor Agreements

Whether you're onboarding a permanent team member or collaborating with a freelance contractor, a well-crafted contract is vital for defining roles, responsibilities, and entitlements. This not only establishes clarity for your startup but also safeguards against potential disputes where workers might contest payment issues. Moreover, having these agreements in writing ensures adherence to the Fair Work Act 2009 (Cth), helping your startup steer clear of hefty penalties associated with violations of the National Employment Standard.

3. Confidentiality Agreement

The core of a new startup lies in its business ideas, trade secrets, and trademarks, which should be kept confidential and protected from external exposure. This encompasses valuable assets such as customer lists, marketing strategies, and information providing a competitive edge. Implementing a confidentiality agreement is a strategic step to discourage theft, empowering the business to assert its rights in court, seek compensation, or impose an injunction when necessary.