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The Key Legal Documents For Small & Global Businesses

It’s no secret that paperwork still plays a big part in how the corporate world runs, and there are many key legal documents that businesses need to get to grips with. Whether to lawfully establish an organisation or hire a new employee, companies will quickly find that every step of their journey requires agreements, contracts and records.

Regularly reviewing and updating this paperwork when required is vital. This means organisations are always complying with the law and safeguarding themselves against potential legal disputes. And while we are about to discuss the documents startups need before going into business for the first time, these are just as important for established enterprises. In particular, companies who are expanding internationally will need professional legal translations for all of this information.

In order to ensure your company is following the law abroad, every document must be easily understood by all relevant parties, no matter what language they speak. This is why every word must be translated accurately, while maintaining all of the context and nuance that gives the document its full meaning.

Memorandum of Association

Budding UK businesses need a memorandum of association in order to legally register as a company. This is a legal statement, signed by all initial shareholders or guarantors, which confirms that all signatories have agreed to form a company and become its first members.

If, like most businesses, a company decides to register online, a memorandum of association will be automatically created during the process. However, companies registering by post will have to submit this memorandum of association template instead. All information must be accurate, as this record cannot be updated once company registration is complete.

Articles of Association

Articles of association are also required to register a company in the UK, outlining exactly how it will be owned, governed and run, as agreed by shareholders, guarantors, directors and the company secretary.

It’s crucial that owners have a clear understanding of these legal documents and ensure personnel are always following the agreed-upon processes and formalities. Regularly reviewing these articles is necessary in case new provisions are required or existing clauses are no longer relevant.

Companies are free to write their own version though it’s often useful to follow the standard default model articles of association. The template you use will depend on whether your organisation is a private company limited by shares, private company limited by guarantee, or a public company.

Please note that articles of association are not the same as articles of incorporation, which are legal documents that US and Canadian businesses need to file with a government body when establishing a new corporation.

Non-Disclosure Agreement

Non-disclosure agreements (NDAs) allow organisations to safeguard ideas, knowledge and innovations that could be crucial to its products, services or branding. These can be ‘one way’ legal documents, if the business alone is disclosing information to a third party, or ‘mutual’ if both are. NDAs, also known as confidentiality agreements, protect confidential information, though it may be shared at a later date.

For example, if a CEO wanted to discuss a new logo with a graphic designer, an NDA would legally forbid a third party (in this case, the designer) from sharing details of the meeting with anyone else. Without this documentation, this information could be leaked, or even passed on to competitors who may implement these ideas themselves. If such a meeting took place with an international company, translating an NDA would be necessary to ensure that the graphic designer fully understood the terms of the confidentiality agreement.

According to GOV.UK: “A good NDA restricts the use of the ideas and information to a specific permitted purpose.” This means that companies need to be precise about the details they want the agreement to cover, and how long the period of confidentiality will last — it typically spans between three and five years. It’s also important to be realistic about the terms of an NDA, as a third party may need to share certain intelligence with employees, advisors or other businesses in order to do their job. For example, a manufacturer may need to disclose information to a supplier before calculating whether they can bring a business’s invention to life.

Employment Contract

Every new recruit is given a contract when they join a company which allows the employer and employee to legally enforce their rights and expectations. Different contracts may be required for different roles within the business. For example, senior team members will typically have longer notice periods than junior staff.

These legal documents should be as clear and transparent as possible, ensuring parties fully understand the terms of the relationship in order to minimise the likelihood of conflict. If problems do arise, this document can help resolve matters internally, and avoid costly and time-consuming legal action.

According to the Employment Rights Act 1996, employment contracts must include:

  • Employer and employee names
  • Job title and description
  • Date employment commenced and date when continuous employment began
  • Salary and how often employees will be paid
  • Details of working hours and place of work
  • Holiday, sick pay and pension provisions
  • Notice period
  • End date if this is fixed-term employment
  • Any collective agreements directly affecting terms and conditions of employment

From 6 April 2020, new employees have a right to a contract from their first day of employment.

Terms and Conditions

Terms and conditions (T&Cs) clearly outline what a business will and won’t provide as part of its service. As well as ensuring the client clearly knows what to expect, these legal documents also protect the company’s finances by explaining how payment works and the consequences of breaching these terms. T&Cs also allow businesses to comply with certain legal obligations, such as disclosing the customer’s cancellation rights. In the event of a legal dispute, this document will be the court’s main point of reference so it’s crucial that the information included is extensive and accurate.

While there are standard terms and conditions for goods, it is sensible for businesses to obtain legal advice so they can ensure their documentation is as specific to their enterprise as possible. Not only are T&Cs important from a legal perspective, but this documentation also makes the company appear professional, and boosts its appeal to potential customers. It’s also important to cover online content by including terms and conditions on the website, minimising the risk of businesses being held liable for any faults arising from the site’s use. This means that when enterprises are translating their websites for international customers, they must ensure their T&Cs are also converted into the correct language.

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