Top 8 Legal Documents Every Startup Should Have

Entrepreneurs/founders are known to gamble with calculated risks as a recipe for success. For them, every day is a risk-taking- make or break situation. Startups are a battleground for entrepreneurs to showcase their bubbling skills and risk-taking capabilities to the world. But one should ensure they don't end up in legal soup by missing out on any of the critical legal documents for startups required by every new business. Overall no one wants to get engaged in legal matters.
It has been observed that during the initial days, entrepreneurs make many mistakes. It is interesting to dig the imaginative ideas with the expectation of hope turning into reality.
Welcome back, readers. Today is a new day and a new topic. We have been researching more upcoming blog ideas and collecting information for the past few days. Therefore, we decided to make things easier by delivering legal information to entrepreneurs who don’t know much about legal formalities and are unsure how to begin. Therefore we decided to cover the legal structure (legal documents for startups) that every startup requires and should be done in the initial phase.
Below, we’ve outlined the eight-core legal documents for startups that founders need to implement to avoid costly legal battles down the road.

1. Articles of Incorporation
A common mistake startup founders make failing to put an adequate business structure in place. Putting up only a sole proprietorship can result in high-income tax bills and legal liabilities for which entrepreneurs are directly responsible. In addition, by not filing the Internal Revenue Service (IRS) to form a distinct legal entity for their business, there might be a chance where founders risk losing their savings and, in some exceptional cases, their homes or land.
All options have their pros and cons. For the most general part, startups with multiple shareholders should form a C corporation. On the other hand, businesses that want fewer tax obligations and avoid heftier fees during early growth should consider creating a limited liability company (LLC).

2. Intellectual Property Assignment Agreement
Many startups are formed on intellectual property and high hopes. For example, the intellectual property might be software copyright or a pending patent for a new device. The company may not own intellectual property without an intellectual property assignment agreement.
For example, suppose one of your founders created software before your company was established. In that case, they own the copyright to that software unless there is a written assignment agreement transferring the copyright to your startup.

https://unboxingstartups.com/top-8-legal-documents-every-startup-should-have/