What are Legal Agreements?

Legal agreements are arrangements executed between two or more parties that define the scope & limitation of the venture undertaken by them along with the Rights, Interests, Duties & Obligations of all the parties. Provenience helps you to understand the importance & necessity along with the drafting & Signing of various Agreements required for running any business. A brief of such agreements is mentioned below:

Employment Agreement: An employment contract is a document that is signed between the employer and the employee. This agreement clearly defines all the aspects related to employment laying down the rights, duties, interests & responsibilities of both the employer & the employee during such tenure of employment.

Service Level Agreement: It is an agreement executed between the Service Provider & the Service Recipient defining the terms & Conditions of the Service to be provided. It provides clarity with respect to the scope of services, manner of providing services and fees to be charged for such services in order to ensure smooth working & avoidance of any future dispute.

Non-Disclosure Agreement: A non-Disclosure Agreement usually referred to as NDA is executed merely for the purpose of securing the confidentiality of any sensitive or material information with respect to any Business Organisation, Business Idea, and any other business perspective shared with any person as part of receiving services from a person or undertaking any project with that person. This can be part of the main agreement as a clause of NDA or can be executed as a separate agreement.

Shareholders’ Agreement: It is an agreement signed between the investor and the investee company. Investors are the shareholders of the Company who invest their earnings in the company by acquiring shares. Therefore to secure the interest of both the investor and the investee, a shareholders’ agreement is entered between them which clearly defines the rights, duties, liabilities, returns, and other important factors for both the parties. To ensure the protection of the rights of the shareholders, these agreements are very important and highly in demand.

ESOP Agreement: ESOP refers to the “Employees Stock Option Plan” introduced for the benefit of the employees of the organization for their motivation and long-run retention in the company. Under this, an option is offered to the employees to acquire a part of the stock at a discounted price on a future date. This plan works out in various stages starting from the offer of the option, to its granting, then vesting, and then exercising of the option. Hence these technical stages and all their terms & conditions are required to be reduced in writing by an Agreement referred to as ESOP Agreement.

Founders Agreement: This is an agreement signed between the founders of the Company to clearly define the rights, duties, and obligations of each founder towards the organization and to avoid any dispute between the founders going forward. This type of Agreement is either entered at the commencement of the business or generally at times when a new person is to be added in the organization as a Co-founder. This Agreement covers all the aspects of running a business together with the role of the respective founder in such a situation.

Other Legal Agreements: When a business commences, there are a number of arrangements made by the management of the entity with the third party(s) which may relate to purchases, sales or supply of products and services, uses of various technologies, renting or leasing of properties or equipment, new joint ventures, etc. Hence to reduce all these arrangements in writing various agreements are executed like Purchase Agreements, Sales or Supply Agreements, Joint Venture Agreements, Lease Agreements, Technical Agreements, Authorization Agreements, etc.