Startups most important contracts

Mar 21, 2023

Start-ups contracts every founders should know.


Starting a business is an exciting journey, but it’s important to ensure you have the right legal contracts in place from the beginning. In this article, we will take a closer look at seven of the most important legal contracts that every start-up should consider.


Articles of Incorporation

The Articles of Incorporation are the legal document that formally creates a corporation and defines its structure and purpose. This document is filed with the state government and outlines key information about the company, such as the names of the directors and shareholders, the company’s purpose, and the type of stock to be issued.

The importance of having a clear and accurate Articles of Incorporation cannot be overstated. It sets the foundation for the company’s governance and provides a roadmap for future decision-making. It also establishes the company’s legal status and limits the liability of its shareholders.


Intellectual Property (IP) Assignment Agreement

An Intellectual Property (IP) Assignment Agreement is used to transfer ownership of a company’s intellectual property (such as patents, trademarks, or copyrights) from one party to another.

This agreement is crucial for start-ups because it helps to protect their valuable intellectual property and ensure that it is properly assigned to the company. It’s important to have this agreement in place before starting to develop any products or services, as it will ensure that the company has the exclusive right to use and commercialize its intellectual property.



Bylaws are the internal rules that govern the operation of a corporation. They outline important details such as the duties and responsibilities of the directors, the process for electing new directors, and the procedures for holding meetings and voting on important issues. Bylaws provide a framework for how the company will operate and make decisions and help to ensure that everyone is working together towards the same goals. They also provide clarity on key decision-making processes, such as how the company will raise capital or make changes to its leadership.


Founder’s Agreement

A Founder’s Agreement is a contract between the founders of a start-up that outlines the terms of their working relationship and their respective rights and responsibilities. This agreement is important for start-ups because it helps to ensure that all of the founders are on the same page and working towards the same goals. It provides clarity on key issues such as equity ownership, management responsibilities, and exit strategies, and helps to prevent disagreements and misunderstandings from arising down the road.


Non-Disclosure Agreements (NDAs)

Non-Disclosure Agreements (NDAs) are used to protect confidential information from being disclosed to third parties. This is especially important for start-ups, who may be sharing sensitive information with potential investors, customers, or employees.

NDAs help to ensure that confidential information remains protected, which is essential for maintaining the competitive advantage of the company. They also help to build trust with investors, customers, and employees, who are more likely to engage with the company if they know that their information will be protected.


Employee Contracts and Offer Letters

Employee Contracts and Offer Letters are crucial for start-ups because they set out the terms and conditions of employment for each employee. You can outline key details as job duties, compensation, benefits, and the process for termination.

A clearly defined employee contract helps ensure that everyone understands their roles and responsibilities, which is essential for building a strong and productive team. It also helps to prevent misunderstandings and disputes from arising and provides a clear process for addressing any of that  issues.


Shareholder Agreements

Shareholder Agreements are contracts between the shareholders of a company that outline the terms and conditions of their ownership. This includes things like voting rights, management responsibilities, and the process for buying and selling shares.

Having a clear and well-defined Shareholder Agreement is important for start-ups because it helps to ensure that everyone is on the same page when it comes to the ownership and governance of the company. It also helps to prevent disputes from arising, as all parties will have a clear understanding of their rights and responsibilities.


Website Terms of Use Agreement

A Website Terms of Use Agreement is a legal agreement between a website owner and its users. It outlines the rules and guidelines for using the website, as well as the rights and responsibilities of both the website owner and its users.

The importance of having a Website Terms of Use Agreement for start-ups is twofold:

  • Firstly, it helps to protect the website owner’s intellectual property and content by setting out the conditions under which users are allowed to use the site. This can include restrictions on copying, sharing, or otherwise using the content without permission.
  • Secondly, it helps to limit the website owner’s liability by setting out the terms under which users can use the site. This can include provisions that absolve the website owner of responsibility for any damages or losses suffered by users as a result of their use of the site.

In order to be effective, a Website Terms of Use Agreement should be well-drafted and clearly communicated to users. It should be accessible from the website’s homepage and prominently displayed to users before they begin using the site. It should also be updated regularly to reflect any changes to the website or its terms of use.



These contracts are the cornerstone of any successful start-up or growing business. They provide a foundation for the company’s governance and decision-making, protect its valuable intellectual property, and ensure that everyone is working together towards the same goals.

With the right legal foundation in place, you’ll be well on your way to achieving success and scaling your business to new heights.


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