10 Types of Business Documents Every Business Needs
Documents are essential in business; a business can’t run without them. Business documents are essential to a business for numerous reasons; from validating a business to securing it, documents provide legitimacy and protection.
However, sometimes keeping business documents with you can become difficult as there are so many of them. That’s why you must first find out which are the most important ones that you should keep with you, and which aren’t.
So here is a business documents list containing 10 types of business documents that every business need:
1. Documentation of Bylaws
Bylaws are laws that are created by a company so that they can maintain order and control in their business. You can consider Bylaws as the road map on how to run your business. These startup business documents contain important information about the company’s responsibilities, shareholder rights and duties, employment and elimination of directors, the company’s behavior, and the schedules of annual board meetings.
Bylaws also help to make sure that the meetings are productive and decide if a meeting needs to be held if something needs to be approved. Although some states don’t require these documents, it’s still good to keep them with you in case of a problem in the future. These laws also act as guidelines on handling certain issues and situations, and they also help protect a business and its rights.
When it comes to writing Bylaws business documents, many people are clueless as to what type of information they should add to them. Here are 8 key components that you can add or write in your Bylaws documents:
- Basic corporate information
- Board of directors
- Conflicts of interest
2. Non-Disclosure Agreement (NDA)
These are startup business documents that are created to protect important and confidential company information, such as ideas for new product launches, customer information, and financial records. They’re also used in making negotiations and deals for business transactions.
To prevent this important information from getting leaked out, the company decides to make their employees sign a non-disclosure agreement document before sharing any bit of confidential information with their employees. If any of this information gets leaked, it could cause them to suffer a major loss.
The non-disclosure agreement document states that the employee signing the document cannot disclose any of the classified information under any circumstances while working for the company. This type of non-disclosure agreement is called a unilateral agreement.
Another type of non-disclosure agreement is called mutual agreement. It is the type of agreement in which two parties agree on the same terms and causes, in this case when two companies collaborate to create a product and agree to not disclose any information about the product before its launch.
3. Operating Agreement LLC
Operating Agreement LLC (Limited Liability Corporation) documents are business documents that are very beneficial and important for LLCs that have many members in them. With the help of this document, the responsibilities and duties of the company are divided among the members equally.
This document also helps prepare members on what to do when a member decides to leave the company to avoid any burden falling on a member and to avoid suffering from losses because of that member leaving. Overall, this document can help protect a company’s status as well as provide solutions on what to do in case of any issues that may occur in the company.
Here are some of the key points that come under this agreement document:
- Transfer of interests
- Withdrawal of a member and the dissolution of the business
- How profits and losses are shared
- Fiduciary duties of members
- Method of dispute resolution
- Ownership and classes of interests
4. Minutes of Meeting
MoMs or meeting minutes are one of the most essential documents in our business documents list; they contain the details of every meeting that happens in a company such as, the topic of discussion, the attendees, decisions, the nature of the meeting, etc. Once these details are recorded in a document, they can be referred to anytime if and when required. The minutes of the meeting document can help clear any doubt that a person might have about a specific meeting.
However, taking minutes of a meeting is not an easy job for a person to do; there are certain rules that must be followed when recording the details of a meeting, such as listening well and understanding what the members are saying before writing anything down. It’s also important to write everything neatly and clearly so that it’s not difficult to read and understand when they’re referred to in the future.
5. Employment Agreement
The Employment Agreement document is a legal contract signed by 2 parties, the employee and the employer (or the company), stating the obligations and responsibilities that they have to follow and their agreement with the terms written in them.
Although employees don’t need to have this document with them at the company, it’s still important for them to sign it as it helps resolve any issues that may occur between the employees and the employers.
However, the Employment Agreement documents vary depending on the laws of a country and the company. Many times, the employees are asked if there’s anything that they wish to include or exclude so that they don’t face any complications in the future.
6. Business Plans
The business plans document is one the most important business documents examples. It’s the road map to how you need to start your business and run it successfully. This document contains the strategies that you made to help your company achieve its goals, information about your company, what the business is about, and what type of products are being sold.
However, you should keep in mind that you can only create a business plan after doing lots of thorough research. Such as finding out about what you can do to attract customers’ attention and who your competition is. With the help of this research, you’ll be able to create a business plan document easily that can help your business reach its desired targets.
7. Business Reports
Another entity that is one of the most important business documents examples is the Business reports. The purpose of having this document with you is so that you can keep track and monitor the business’s overall performance, the areas that need improvement, etc.
In case the members of the company come across an issue, this document works as a guide to help them make decisions and provide solutions to fix that issue. They help inform the members about the company’s expenditures, development, and profits. During meetings, they also help the members provide ownership information and financial data to the government or shareholders.
8. Financial Agreement
if you own a business, then you need to have this document so that you can keep track of the finances and your budget. This way, you’ll be able to know whether you’re gaining any benefits or losses. The financial agreement document also helps you to fill in taxes and informs you on whether the departments in your company are being helpful and productive or not. Here are some of these financial business documents examples:
- P&L (Profit & Loss)
- Balance sheet
- Bank statement
- Payroll Reports
9. Transactional Documents
Similar to financial agreement documents, transactional documents are used to keep track of finances and help arrange them. The documents that come under this are receipts, invoices, order forms, and transactional forms. By collecting them, you can write a report so that all of the information gets neatly arranged in one document; this way, you won’t feel the need to go through so much paperwork.
10. Partnership Agreement
This is a legal contract signed between two parties who run a business together, agreeing with the terms and conditions stated in this document to share the profits and losses. The purpose of this document is to help avoid conflicts that could occur between the parties.