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. 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 you approve an increase. A budget protects you from cost overruns.
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.
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.
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.
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.
Being a sole proprietor means you haven't incorporated and are doing business in your own personal name.
A Statement of Work is always tied to a Master Services Agreement. Do you know the date the Master Services Agreement was signed?
What is a Master Services Agreement?
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.
Why do you need to know the date?
We refer to the date of the Master Services Agreement so there's no confusion about which agreement the Statement of Work is attached to.
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Master Services Agreement. Here's where you can make a Master Services Agreement to go along with your Statement of Work (opens in a new tab, you won't lose your spot). It only takes a few minutes to make one.
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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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