Essential Business Documents Every Business Needs

close-up photograph of a person with a file of essential business documents
Want to set your business up for success? You’ll need to secure some essential business documents to do it right. Here are some of the most important ones:.

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Securing essential business documents is important to the success of any business. However, it’s also one of the most tedious parts of every entrepreneur’s business journey.

After all, a single mistake in writing contracts can have highly detrimental effects on your business. Unfortunately, checking business documents can be difficult, especially if you’re not familiar with business jargon. The last thing you want is for your business to suffer from not identifying the loopholes in a document.  

So, what’s the use of these legal documents? 

For starters, some of this formal paperwork ensures your business has been compliant with state laws. Meanwhile, some are agreements between two parties to ensure your business is protected from lawsuits and other legal issues. 

What are essential business documents?

These business certificates or documents are essential to your company’s internal and external management. They provide all the necessary information and documentation your business needs to operate effectively. Moreover, these documents may take the form of policies, lawsuit-related paperwork, reports, or contracts. 

Certain essential business documents – legal or otherwise – such as your business plan, annual report, and financial statements can shape the future of your business. They give investors an overview of your business’s track record and help you reassess your long-term business goals. 

Some can also help in any legal troubles your business may encounter in the future. Legal professionals can better swing a case in your favor with the help of proper documentation. 

Now you’re probably thinking, with so many different documents to consider, which ones do I actually need for my business to be successful?

Don’t worry. We’ve done all the hard work for you. Here’s a list of essential business documents your business should have on hand at all times.

Essential business documents every business needs

Company bylaws

These essential business documents aren’t a requirement you need to submit with the state you incorporate your business in. It’s simply a set of rules and regulations that your business establishes to ensure order and organization. 

It provides your staff with guidelines of agreed standards and practices, making it beneficial for both you and your employees. It helps solve internal disputes, provides a clear definition of responsibilities, and includes basic information about your company. 

Business plan

No business should operate without having a well-crafted business plan. As the name suggests, a business plan is an outline of your company’s goals and how you can achieve them. 

A good business plan requires extensive research, patience, and proper execution. Your business plan needs to answer these critical questions:

  • What need is your business trying to address?
  • Is your business unique from current alternatives?
  • Who are your competitors?
  • Who will your target market be?
  • What marketing strategies and tools will you use?
  • Are your goals realistic?
  • How much investment is needed for you to generate positive revenue?

Annual report

These essential business documents contain important information to help you gain insight and make sound decisions. It includes data such as your financial performance, company hierarchy, and your business activities in the given fiscal year.

An annual report outlines a variety of elements that concern your business. It can help you do the following:

  • Refine your business strategy
  • Set realistic yet attainable business goals for the upcoming year
  • Assess if your goals were met

Minutes of your business meeting

The minutes of any meeting are essential documents that keep everyone informed about what was discussed in the latest meeting. Keeping everything on record will avoid any misunderstandings. Minutes also ensure that there’s no question as to the responsibilities assigned to all those present. 

Employment agreement

Similar to company bylaws, every employee must abide by certain terms and conditions. Although not all businesses require their employees to sign one, it does add a layer of protection for your business. This is where you set the ground rules from day one between you and your employee. Moreover, this document can be used as evidence to show that one party has failed to fulfill its obligations. You can use this to your advantage by adding conditions that protect your business in all eventualities.  

Financial documents

Most startups fail due to a lack of cash flow. As a business owner, you must keep tabs on all your business expenditures. This helps you understand whether your business is still within its budget, generating revenue, or experiencing financial losses. Furthermore, it helps you identify which departments have been productive and which haven’t. 

Important financial documents your business should have include:  

  • Income statements
  • Balance sheets
  • Bank statements
  • Payroll reports
  • Receipt records

* Financial documents are usually created on an annual basis. 

Privacy policies

When you obtain or relay sensitive information related to business, you or your customers should agree to a privacy policy. The purpose of this document is to safeguard all parties to ensure details such as financial records, customer information, and other confidential information aren’t shared with the public.

For businesses with an online presence, a privacy policy is a must. This guarantees that you and your clients or customers are legally protected by privacy laws. 

Regulatory and compliance documents

Most industries will require proof that your business operates within regulatory limits and standards. Compliance documents act as evidence that your business is legally compliant with all regulatory boundaries. The most common documents that fall under this category are tax compliance and the treatment of employees. However, these documents also include:

  • Memorandum of Association
  • Articles of Association
  • Certificate of Incorporation
  • Goods and Service Tax Certificate
  • Adequate Business License

If your business has complied with all the requirements, the state can then issue a certificate of good standing.

Business insurance

Even if you’ve done everything right, you should still have a safety net in place in case things go awry. Having your business insured will protect your business from natural disasters and crimes. 

When acquiring insurance, be sure to read the FINE PRINT since some insurance companies only cover certain losses.

Final thoughts

As a business owner, you need to be prepared for anything. Having all of the essential business documents on hand can safeguard your business from financial losses and lawsuits.

Furthermore, essential business documents can help steer your business to success. If you’re feeling overwhelmed by the abundance of essential business requirements, you can always hire registered business agents. They will take care of filing and processing all your business documents, protect your personal assets, and much more.

“Fortune does favor the bold and you’ll never know what you’re capable of if you don’t try.” ― Sheryl Sandberg

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