Whether you own a startup or a growing business, legally binding documents are crucial for maintaining compliance. Without updating, auditing, organizing, and maintaining these documents, business owners end up paying hefty penalties.
Outcomes for missing out on managing these documents can be threatening to the success of the business and its operations. It can damage the goodwill and market reputation of a startup in minutes.
To continue your business operations seamlessly, maintain the paperwork at all times. Read the post ahead and get familiar with the strategies and approaches to do the same.
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What are legally binding documents?
Not all business documents are legally binding. For a contract or document to be legally binding for startups or business owners, these conditions must be met:
- One party must make an offer, and the other must accept it.
- Each party must have communicated the benefits and responsibilities associated with the contract to each other.
- There must be a mutual understanding between both parties to execute the terms of the contract in good faith without breaching the terms.
All the parties involved in the legally binding contract must be eligible to sign and acknowledge the documents.
Without meeting these terms, the court can’t consider it a legally binding document or contract. Thus, it will fail to be legal evidence in the court for building a strong case against the breacher of the contract if and when required.
Legally binding contracts must usually be written to state and communicate all terms clearly and completely. Verbal communication can be misleading, and the other party might be misunderstood because of a lack of communication skills.
Such documents require either physically wet signatures or digitally printed signatures to be valid. It binds both the parties mentioned in the contract to the terms so no one dares to breach it intentionally.
What are the most crucial ways of managing and organizing legally binding documents for your businesses?
1. Acquiring all legal licenses and permits at the beginning.
Before beginning a legal business, you need all permits and licenses in place. Otherwise, you could lose your ability and power to run the business in the county, city, or state.
Follow the list of documents you may need eventually before you get operational:
- State-wise licenses: Each state or city has its jurisdiction, stating various laws and regulations. Adhere to those by following the compliances and getting the license or permission to run your business there. It is like a declaration from your business entity or unit that it understands the bylaws and conforms to them while running its operations.
- Certificate of incorporation: You need to file for the certificate of incorporation at the registrar’s office. They may ask you all the details related to the stakeholders or promoters and their responsibility, liability, and stake in the business.
You will also have to state the products, services, and industry you’re serving while submitting all relevant documents to the state’s registrar of companies.
Once you obtain all relevant documents for your business, ensure that you maintain them regularly. When you have enough funds, hire a company secretary to look after the compliance work.
A lapse in updating your business legal documents can end up in penalties you don’t want to pay.
Remember to post or publish your updated documents in the offices. Discard the old or obsolete ones. It will not create any nuisance. Also, update the policies and documents on the online storage for the entire business unit to review.
2. Digitally signing legally binding contracts.
Ensure that whatever business document you create contains complete information. Move beyond that, get the electronic signature API integration on the online document repository system.
It will empower every party to sign the document digitally without having to print the contract physically and send it over by fax or scan. This makes the process more seamless, quick, and error-free.
Every person involved in the contract will have a unique digital signature. This will remove any chances of forgery from either party’s end.
Both parties of a legally binding contract can sign the contract in seconds, saving hours wasted in follow-ups and parceling the courier.
3. Safely secure legal documents for anytime access.
Ensure to label the documents properly in the folders or print them for a final check after receiving the digital signatures. Safekeep them in the encrypted folders and servers. Allow only the concerned person access to the same to maintain confidentiality.
Grant any time access to those who have permission to do so from anywhere in the world. Save the documents on the cloud servers to have the maximum security and bypass any virtual attacks.
Trust the hosting services that offer you online backups to avoid data loss in any condition.
4. Keeping up with the changes in state laws and policies.
Hire a CS or company secretary to keep pace with the amendments in the company law. Let them file for updates, regular compliance, and returns on time. They will also be in charge of publishing company announcements in legally binding formats.
A seasoned CS can help you audit the company documents on time. Avoid paying heavy penalties and work on seamlessly maintaining legal documents in a single platform or place.
5. Exchanging business contracts and documents smartly.
You will have to share your business or legally binding documents with the stakeholders. Many of those might have the right tools to view the document in another format. Trust an online document conversion tool or software to save time and effort for each party. Viewing and downloading the legal document in a chosen format becomes fast. This improves the business productivity to expedite the closed deals and improve the acumen of the liaison manager.
Are you ready to organize and manage legally binding documents at your workplace?
Ensure that you follow the guided steps discussed above. First, get all your documents in one place. Know the difference between business documents and legally binding contracts.
Complete and update those contracts on time with easy and safe storage, timely compliance, and digital signature to close deals right on time!