The Legal Documents Every Business Should Have in Place

Most business disputes do not start with a dramatic falling out. They start with something that was never properly documented. Jamie-Lee Pouwhare, Principal Solicitor at Dawson Pouwhare says

"The situations that become expensive and complicated are almost always ones where the parties assumed they understood each other. Getting the right agreements in place early is not pessimistic. It is practical."

Here are the legal documents that every business should have sorted, and what each one actually does.

A Shareholders Agreement (If You Have Co-Owners)

If you are running a company with other shareholders, a shareholders agreement sets out how decisions are made, how shares can be transferred, what happens if a shareholder wants to exit, and how disputes are resolved.

Without one, you are relying on the default rules under the Corporations Act, which may not reflect what you and your co-owners actually agreed to, or what would be fair in your specific situation.

"Co-owners often start out with complete trust in each other," Jamie-Lee says. "A shareholders agreement is not about distrust. It is about having a clear framework for the moments when things get complicated, because eventually, they do."

A Partnership Agreement (If You Are Not a Company)

For businesses structured as partnerships, a formal partnership agreement covers the same ground as a shareholders agreement: roles, profit sharing, decision-making, what happens if someone wants to leave or if the partnership dissolves.

Without a written agreement, the Partnership Act 1892 (NSW) fills the gaps with default rules that may not suit your circumstances.

Commercial Contracts and Terms

If your business sells goods or services, your terms and conditions are a legal document, whether or not they look like one. They set out what you are providing, what the client is paying, what happens if something goes wrong, and who is liable for what.

"Businesses often operate for years on informal agreements and email chains," Jamie-Lee says. "That can work until it does not. Having clear written terms protects you and gives your clients clarity about what they have agreed to."

A Privacy Policy

If your business collects personal information (and almost every business does) a privacy policy is a legal requirement under the Privacy Act 1988 (Cth). It must explain what information you collect, how you use it, and how it is protected.

Employment Contracts

Every employee should have a written employment contract. Beyond the legal protections it provides, a clear contract sets expectations on both sides from the start: role, remuneration, leave entitlements, confidentiality and what happens if employment ends.

A Commercial Lease Review

If you operate from commercial premises, your lease is one of your most significant legal documents. Before signing or renewing, have it reviewed by a solicitor. The terms you agree to, particularly around make-good obligations, outgoings and rent review mechanisms, can have a material effect on your business for years.

"The common thread across all of these is that they are most useful before a problem arises, not after," Jamie-Lee says. "Getting good legal foundations in place early is almost always cheaper and easier than trying to fix things once something has gone wrong."

Dawson Pouwhare Legal & Conveyancing advises businesses across Lake Macquarie and the Hunter on commercial contracts, leases, shareholder agreements and more. Contact our team on (02) 4954 8666.