What is a Master Services Agreement format?
Each phase of your project will have different tasks, services, prices, and other terms for what you’re going to do. Rather than having to sign up a whole new agreement each time, we put all of those details into a shorter document called a "Statement of Work". When the next phase comes along, you do up a new Statement of Work with the details for the next phase.
Each Statement of Work is controlled by the Master Services Agreement. That's where your "master" terms that will apply to every phase of your project live. Since these master terms don't change, you don’t need to keep signing up a new contract each time you start a new phase of a project. You just do up a short Statement of Work, attach it to the Master Services Agreement, and you're ready to start.
If you choose this option, we will make your document as a Master Services Agreement. Your first Statement of Work will also be included.
Being a sole proprietor means you haven't incorporated and are doing business in your own personal name.
This helps us to know which laws apply to your document.
Hint: if you have a work proposal document, you can refer to that rather than writing it all out again (e.g. "the services outlined in the proposal dated May 1, 2019").
Let's go over what will be accomplished by the end of this phase of the project. Each field is optional, so just use the ones you need. You can also add more rows if you need to.
You can include an optional budget for your work. The way it works is you set a budget amount and once it's reached, the work pauses until you approve an increase. A budget protects you from cost overruns. We put this budget into your Statement of Work, so you can always change it for the next phase of your project.
Are there any additional terms you want to include about the services? This is where you can add your own words and we'll put them into the contract for you.
Are you providing the Contractor with any tools, equipment, or other items needed to get the work done? Describe what you're supplying and we'll put it into the contract.
Let's go over what will be accomplished by the end of this phase of the project. When you start a new phase of the project, this is where you can update the work you will do.
You can include an optional budget for your work. The way it works is you set a budget amount and once it's reached, the work pauses until your client approves an increase. Clients sometimes ask for a budget to prevent cost overruns. We put this budget into your Statement of Work, so you can always change it for the next phase of your project.
Is your client providing any tools, equipment, or other items needed to get the work done? Describe what they're supplying and we'll put it into the contract.
Usually, invoices are due within 14 or 30 days. They may also be due upon receipt.
Charging interest on late payments is a common way to encourage your client to pay on time. A common interest rate would be between 2% and 5%.
It's in your better interests to not pay a deposit before the work starts. Contractor's sometimes ask for a deposit to give them security that they will cover some of their costs if the client doesn't pay. But as the client, you may be worried that the Contractor won't work as quickly or as well if they are paid in advance.
If you do agree to a deposit, try to make it a reasonable amount that gives the Contractor some security but also leaves you comfortable that the Contractor has an incentive to work well and timely.
Let us know if you're collecting a deposit before the work starts. A deposit helps to make sure you get at least something if your client doesn't pay the full amount owed to you. It also makes sure you have a client that's serious about working with you.
Along with the work your contractor does for you, they may have travel costs and other expenses, including things they pay on your behalf like account or filing fees. These are called "out-of-pocket expenses". These extra expenses can be paid by you or you can say your contractor is responsible for them.
It's pretty common to see the contractor charge their client for these sorts of expenses. But if you're in a good negotiating position, you can insist that your contractor take on these expenses and cover them through their rates.
If you agree to pay for out-of-pocket expenses, your contract will say they must be pre-approved by you.
Along with the work you do for your client, there could be travel costs and expenses you pay on your client's behalf, like account or filing fees. These are called "out-of-pocket expenses". These extra expenses can be paid by you or you can charge them to your client. Since out-of-pocket expenses can be unpredictable, it's probably in your best interests to charge your client for them rather than covering them yourself. It's pretty common to see the contractor charge their client for these sorts of expenses.
If you decide to charge your client for out-of-pocket expenses, your contract will say they need to be pre-approved by your client (which is the common way of handing these sorts of expenses). So make sure to remember that.
It's common (and generally a good idea) for clients to require their contractors to have a minimum amount of insurance, usually at least $1 million to $5 million in general liability insurance.
It's common for clients to want you to have some insurance in case something goes wrong. A common request is for the contractor to have $2 million in commercial general liability insurance (called a "CGL" policy). But you can choose any amount you feel makes sense for your work, or not make any promise about insurance at all.
You should only agree to this one if your negotiating position is very weak. Generally speaking, you will want your contractor to agree to keep your information confidential.
Confidentiality promises usually can't last forever (they may be unenforceable if they go on too long). One to three years is pretty typical. If you're unsure, 2 years is a good place to start. 10 years is often seen as the upper limit to confidentiality and more typically seen in sensitive industries.
What kind of protections do you want to include? Click on the "?" buttons if you need help deciding.
Since your contractor may work closely with your employees and other contractors or consultants, you may be concerned about your people taking a job opportunity with the contractor. So, you can ask your contractor to promise to not directly offer a job or other work to your employees, contractors, and consultants.
This kind of promise is called a "non-solicitation" clause. It's a fairly common ask by clients. If you would like to include a non-solicitation clause, we can put one in the contract for you.
You may want to ask your contractor to promise not to work for your competition. For example, if you're hiring the contractor to develop a marketing plan you may not want them to also work for your competitor because it could be a conflict of interest. This kind of promise is called a "non-competition" clause. They are hard to enforce and a court will not uphold the promise if it goes on for too long.
Your contractor will not likely be in favour of adding a non-competition clause because they will want to be free to work for as many clients as they can. But if your work together is very sensitive or you're in a better negotiating position, you could insist on a non-competition clause.
Will you be including any protections for your client? As the contractor, it's in your interest to exclude these things. But if your client is insisting on it, we can add them in and we'll write them in a way that's as favourable to you as possible. Click on the "?" buttons if you need help deciding.
Since you may work closely with your client's employees and their other contractors, your client may be concerned about their people taking a job opportunity with you. For example, if the work you're doing for your client is sensitive or the client has people working for them that are in the same industry as you, they could be worried about losing a key person on their team when they really need them. So, your client may ask you to promise to not directly offer a job or work to their people.
This kind of promise is called a "non-solicitation" clause. It's a fairly common ask by clients. If you would like to include a non-solicitation clause, we can put one in the contract for you.
Your client may ask you to promise not to work for their competition. For example, if your client is hiring you to develop a marketing plan they may not want you to also work for their competitor because it could be a conflict of interest. This kind of promise is called a "non-competition" clause. They are hard to enforce and a court will not uphold the promise if it goes on for too long.
You're likely not in favour of adding a non-competition clause because you want to be free to work for as many clients as you can. But if you would like to include a non-competition clause because the work you're doing is very sensitive or you want to give it to win the client's work, we can include one for you.
Non-solicitation promises are usually upheld by courts, so long as they are reasonable. One to two years is pretty standard. You could have a longer time period if the work is quite sensitive.
Non-competition promises are treated carefully by the courts. If they're too long they won't be enforceable. Unless your work is very sensitive, anything longer than 2 years is probably at risk of being unenforceable if you went to court over it.
If you include a fixed end date, the contract and services will end on that day unless the contractor and client agree to extend the date.
We'll make your contract say you can cancel the services at any time to put you in the best position to move on if you need to. It's common to give your contractor some advance notice though. For example, you can say you will only cancel the services by giving 30 days heads up notice to your contractor. This is a common ask, and allows contractors to plan their workflow and cover any short-term expenses they have already paid for in connection with your work.
As the client, it's in your interests to either not have a notice period or to keep it as short as you can.
The longer, the better for you.
We'll make your contract say you can cancel your services at any time to put you in the best position to move on if you need to. It's common to give your client some advance notice though so they're not left in a bind. For example, you can agree to cancel the services only by giving 15 days heads up notice to your client.
The longer, the better for you.
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A business partner is someone (a person or another company) that is going to be operating the business with you. They could be a co-founder, another business that compliments yours in some way that's joining you on a project, or a strategic partner that you're starting a completely new business with. They may also be, and many times are, part owners of the business. Whatever their role, like you they are actively working to grow and operate the business.
An investor is someone who contributes money or other resources to your business in exchange for owning a part of your business. Investors can be active by giving advice and voting on major business decisions. Investors can also be passive by just giving money or other resources, but only expecting a return on investment and not playing an active role in the business by giving advice or deciding on major business decisions.
A passive investor is one that wants to leave the business and management decisions to you. So, a passive investor provides funds and expects a return on investment, but lets you run your business. They may want to be updated from time to time of course, and they might vote on things like who gets to be on the Board of Directors or a Management Committee, but otherwise they are mostly quiet and let you go about your business and don't take an active part in your operations.
Most common type of business
A Corporation could work great for you.
A general partnership could be suited to what you need right now.
A Limited Partnership could work for you.
Limited Partnerships are made up of Limited Partners and at least one General Partner. The Limited Partners are called "limited" because they are not fully liable for the debts and obligations of the partnership. In other words, they have limited liability. But that limited liability is not perfect - there is a big exception.
The Limited Partners are only protected from liability if they are not taking an active role in the operations of the partnership. If they do, they become fully liable for the partnership's obligations and debts.
The General Partner is the one in charge of managing the business and operations of the partnership. Since it takes on that role, the General Partner is also the one liable for the debts and obligations of the partnership.
All of this means that Limited Partnerships are better suited for a passive investment style with investors coming in as Limited Partners and providing money and resources to earn a return on investment, and the General Partner being the one making the business decisions and managing the operations.
Since your other partners/investors will be, or want to be, actively involved in the business, a Limited Partnership doesn't sound like a good match for you.
You could go into business as just you. We call that being a "Sole Proprietor". But, it isn't typically recommended.
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Starting Up: Corporations and Partnerships
Starting up a business is exciting. There's also a lot of legal terms thrown at you and it's hard to know where to start. We'll explain the difference between Sole Proprietorships (doing business as "just you"), setting up a Corporation, and forming a legal Partnership, and which one may be best for you.
Software Terms of Service
App companies, Software as a Service (SaaS) companies, and other tech companies use Software Terms of Service to set out how people can use their software or app. For example, the Terms of Service include your pricing and payment terms and the services and features you offer. They’ll also cover intellectual property protection and data and privacy. The Terms of Service are your contract with your user and they accept your Terms of Service when they sign up with you for access to your software platform or app.
A Services Agreement (sometimes also called a Consulting Agreement or an Independent Contractor Agreement) is a contract that outlines what services a person or company will do. Service businesses of all kinds use a Services Agreement for their work – website designers, marketers, consultants, and freelancers are just some examples.
You can also use a Master Services Agreement format if you’re working on a project with a few different phases. This format uses a Statement of Work that outlines what you will do for each project phase.
Independent Contractor Agreement
Sometimes it doesn’t make sense to hire a person as an employee just yet, but you still want to work with them. Maybe you’re not ready to hire employees for now or you might want them to keep the risk of what they do in their own business rather than taking that on yourself. Whatever the reason, you still want to work with them. If that’s the case, you can work with them as an Independent Contractor. We’ll walk you through what you need to put into your contract for their work.
Sales and Services Terms and Conditions
A professional business has Sales Terms and Conditions covering things like warranty and product support, product delivery, privacy and data use, any software licensing that goes along with your product. Your Sales Terms and Condition should also cover things you may not have thought about, like keeping your rights to copyrights, patents, and branding and limiting your liability if your customer uses your product in strange ways (the “seriously, please don’t do this at home” kind of stuff).
You can add your Sales and Services Terms and Conditions to an e-commerce order, a sales invoice, or have them signed as a separate document.
Sales Representative Agreement
You have great things to sell and now you need great people to help you sell them. That’s what a Sales Representative Agreement helps you with. We’ll get you set up with commission payments, any geographic territory limits you want to include, inventory management, and the other key things you need to think about when hiring or contracting with someone to sell your products.
Employing quality people means you should have a quality contract. But where do you start? We’ll walk through all the pieces of an employment contract, like how your employee will be paid. For example, salary or hourly wage, bonuses, and commissions. We’ll also go over how much notice you’ll give if you decide to end their employment. We’ll look at some not so obvious things too, like whether your employee should be allowed to compete with you or approach your clients after they stop working for you and if you’ll have a fixed employment end date or not.
Stock Option and Equity Compensation Plan
Termination of Employment and Release of Claims
Things don’t always work out with someone. So if you need to let someone go without cause (e.g. laying off someone because business is slow or because they’re just not the right fit for your company), you’ll have to formally tell them. You should also try to get a release of claims, which means they are giving up any rights to sue you because of the termination.
A Confidentiality Agreement allows you to share your ideas and confidential information and keep it all safe. The person you share your information with promises to keep it confidential and to give it back to you when you ask for it. They also promise not to use your information against you, like using it to compete with you. The other person also agrees to be responsible for any misuse of your information by their employees and representatives.
You can also include a non-solicitation promise, which means the person you share the information with can’t steal current customers or your employees and contractors.
Letter of Intent
You’re hustling and working on landing that new client or business deal. You need to start sharing ideas and sketching out what the deal will look like, but you’re not ready to sign the contract just yet. So what do you do to protect your ideas, deal points, and info in the meantime?
That’s where a Letter of Intent comes in. It’s a “handshake” deal put down on paper, letting you write out your major deal points so you can move ahead. A Letter of Intent includes things like a description of the deal or project, cost and profit sharing, and other key points that will eventually go into a larger, binding agreement (like a Joint Venture Agreement or a Services Agreement). A Letter of Intent can also include confidentiality promises and agreements to not shop the deal (meaning the other person can’t use your offer to shop around for something better). We’ll guide you through it.
Asset Purchase Agreement
Buying or selling assets is a great way to grow your business. Protect your investment and business with an Asset Purchase Agreement. Whether it’s physical things, like equipment, goods, or inventory, or intangibles like intellectual property or rights to a contract, this is where to start. Check all the legal boxes – payment types, consents, brokers or agents, and even seller and buyer protections.
Intellectual Property Purchase Agreement
Businesses often grow by buying important assets from other businesses. With today’s high tech economy, it’s really common for businesses to buy intellectual property from other companies. For example, you could be buying some of another company’s copyrighted materials. Perhaps you’re buying trademarks or patents, too. You could even be buying their tech, like a software platform, code, or an app. If that’s what you’re up to, this agreement is where you should start.
Assumption of Risk and Waiver of Liability
If you’re a business that offers an experience to your customers then you could really use an Assumption of Risk and Waiver of Liability. For example, rock climbing centres, tours, and gyms have some risk of injury to them. So why use an Assumption of Risk and Waiver of Liability? Well, it outlines the risks for your customer and gets them to agree they’re accepting them before they go ahead. It also has them agree they are limiting your liability and giving up their right to sue you.
Release of Claims
When something wrong happens someone could threaten you with a lawsuit. For example, maybe someone got hurt at your location. Or maybe they weren’t happy with your work and are threatening to sue now. Whatever the reason, you’ve settled the dispute and you’re wanting to make sure the matter is final and you can’t be sued. That’s what a Release of Claims is for. It’s what we use when a person agrees to give up a legal claim they have (or think they have) against you.
Unanimous Shareholder Agreement
A Unanimous Shareholder Agreement, also called a “USA”, is an agreement among all the shareholders of a company. Think of it as the rule book for your business relationship. It says who gets to buy new shares in the company and how you’re allowed to sell your shares. It also says how you’ll vote on important business decisions and what happens if you want to sell the company. We’ll even go over things you may not have thought about, like what happens if someone goes bankrupt or goes through a divorce and someone else claims that person’s shares. All that and more is set out in your Unanimous Shareholder Agreement.
Shareholder Loan Agreement
Shareholders often loan money to their business, especially in the early stages of your company when you’re just getting started, and that’s what a Shareholder Loan Agreement is for. When you loan money to your company, the idea is the business will repay the loan at some point in the future. We’ll go over all the typical considerations for a shareholder loan, like whether you will charge interest and if the company has to make periodic payments or not.
Share Subscription (Purchase) Agreement
Found someone that wants to buy into your business? Amazing, it’s a great way to build a team and finance your business. Your legal agreement for selling a piece of your business doesn’t have to be a headache. We’ll go over the key things to put into your agreement when someone buys into your business.
Use a Promissory Note to put your simple loan down on paper. A Promissory Note shows that someone has borrowed money from someone else and promises to repay it. You can include details about interest, due dates, and whether the loan will be secured by any of the borrower’s assets. We’ll also help you decide what kind of Promissory Note you need. For example, you can choose to have regular payments or not. You can also decide if you want it to be a revolving loan, meaning the borrower can repay and re-borrow as needed.
Guarantor Contribution Agreement
You’d think that when several people guarantee a bank loan, lease, or some other obligation, the creditor would have to collect the fair share from each person if the company doesn’t pay the obligation, but that’s not how it works. The creditor can go after one or more of the people as it sees fit, usually going after the ones that actually have the money to pay. A Guarantor Contribution Agreement solves that problem by making an agreement among all the guarantors that they will reimburse anyone who pays more than their fair share.
Joint Venture Agreement
Entrepreneurs and innovators love to work together, and some great business gets done when they do. But, you may not want to create a formal partnership right now like you would with a new company. That’s where a Joint Venture Agreement comes in. It allows you to set up a project and work with another company, much like a partnership, without creating a whole new company or formal legal partnership. We’ll outline your project and what each of you will do and be responsible for. Your Joint Venture Agreement will also say how you will vote on major business decisions and how money will go in and out of the venture. We’ll go over these and other big deal points to keep your project and working relationship on the right track.
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