5 Legal Documents Every California Startup Needs

By Attorney Christopher Brainard – California Business and General Counsel Lawyer

Starting a business in California is an exciting venture—but without the right legal foundation, even the best ideas can collapse under the weight of avoidable legal problems. Whether you're forming a tech startup, service-based business, or retail brand, strong legal documents are critical from day one.

Here are the five essential legal documents every California startup needs—and why getting them done right from the start can save you thousands later.

1. Formation Documents (Articles of Incorporation or Organization)

Your startup’s legal structure starts here.

  • If you're forming a corporation, you’ll need Articles of Incorporation filed with the California Secretary of State.

  • If you're starting an LLC, you’ll need Articles of Organization.

These documents establish your business as a legal entity separate from you personally—which is essential for:

  • Protecting personal assets

  • Legitimizing your business

  • Attracting investors

You’ll also need to file a Statement of Information and may need to apply for an EIN and local business licenses.

📌 Why You Need a Lawyer: Choosing the wrong entity type can cost you in taxes, investor eligibility, and liability exposure. I help founders make the right choice from the start.

2. Operating Agreement or Corporate Bylaws

Once your business is formed, you need an internal roadmap for how it will be run.

  • LLCs should have a written Operating Agreement (required under California law for multi-member LLCs).

  • Corporations need Bylaws and often a Shareholder Agreement.

These documents:

  • Define ownership percentages and member/shareholder rights

  • Set rules for decision-making, profit distribution, and dispute resolution

  • Protect against internal disputes that can destroy startups

🛡 Pro tip: Even if you’re in business with friends or family, get it in writing. Clear governance documents help prevent misunderstandings before they become lawsuits.

3. Founder Agreements or IP Assignment Agreements

Who owns what? This is critical in every startup—especially those built around intellectual property, code, or product design.

Founder agreements clarify:

  • Who owns IP created before and during the startup’s formation

  • Vesting schedules for equity

  • Roles, responsibilities, and time commitments

  • Exit provisions (what happens if someone leaves)

IP Assignment Agreements ensure that all proprietary work (software, branding, content) belongs to the company, not the individual.

🧠 Why it matters: Lack of clear IP ownership is one of the top reasons startups fail to secure funding or survive co-founder splits.

4. Employment and Independent Contractor Agreements

As you start hiring team members, contractors, or advisors, clear agreements are essential. These should cover:

  • At-will employment language (or fixed-term)

  • Compensation and equity terms

  • Confidentiality and non-solicitation clauses

  • IP assignment provisions

California has strict laws about worker classification, especially under AB 5. Misclassifying employees as contractors can lead to massive fines and backpay liability.

⚠️ Protect your startup: I help startups structure hiring practices that comply with California employment law while protecting trade secrets and core assets.

5. Confidentiality (NDA) and Non-Disclosure Agreements

Before you pitch investors, collaborate with vendors, or hire employees, protect your sensitive information with an NDA.

An effective NDA should:

  • Clearly define what is confidential

  • Set limits on use and disclosure

  • Include remedies for breaches

NDAs are especially important for early-stage businesses developing products, software, or proprietary ideas.

🔒 Pro tip: A “template NDA” downloaded online may not meet California legal standards or protect your business in court. Always use a version tailored to your business model.

Don’t DIY Your Startup’s Legal Foundation

The right documents do more than protect you—they set your business up for growth, investment, and longevity.

At LawBrainard, I provide general counsel services to California startups and small businesses. I’ll help you:

  • Form your entity the right way

  • Draft strong, enforceable contracts

  • Avoid early-stage legal pitfalls

  • Protect your IP and internal relationships

📞 Call (310) 266-4115
🌐 Visit: www.LawBrainard.com
🗓 Schedule a consultation to set your business up for success.

Christopher Brainard is a California business attorney who provides legal counsel to startups, entrepreneurs, and growing companies. He helps clients build legally sound businesses from the ground up—with strategic contracts, strong protections, and a clear path to growth.

*This article/blog is provided for informational and educational purposes only and does not constitute legal advice. Reading this article does not create an attorney-client relationship between you and Christopher Brainard, Esq. An attorney-client relationship can only be formed through a written and signed agreement with Christopher Brainard. If you need legal advice about your specific situation contact us for a consultation.  [Christopher Brainard, 651 N. Sepulveda Blvd., #2010, Bel Air, CA 90049. Tel: (310) 266 - 4115.  Email: christopherbrainard@gmail.com].

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