Employment Agreements for Startups

A startup needs a number of employment agreements and legal document ranging like offer letter, appointment letter and NDA while starting operations. Investing the time and effort to draft well written legal documents at the beginning can save a lot of misunderstanding and liability in the future for the company. Therefore, it is important for Entrepreneurs to understand the basic legal framework and enter into employment agreements using well-drafted legal documents. In this article, we look at some of the most common legal document and employment agreements required for any startup in India.

Offer Letter

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Offer Letter Format

An offer letter is one of the first legal document that any startup has to prepare. An offer letter is usually provided to a prospective candidate after the interview and selection process, detailing the terms of the offer for employment with the Company. A well-drafted offer letter usually contains a congratulatory message, candidate information, the position offered, proposed salary, bonus (if any), the annual cost to the company, proposed employment start date, supervisor information and other information considered important by the employer.

The employment offer letter is usually printed on the letterhead of the company, signed by an authorized person from the company and sent to the prospective employee. If the prospective employee signs and returns a copy of the document, it is considered to be an acceptance of the offer.

Appointment Letter

An appointment letter is a written document containing the terms of employment with a candidate while starting employment. A well-drafted appointment letter must contain the candidate's name, address, age, designation, responsibilities, employment start date, supervisor information, leave policy, benefits entitlement, confidentiality, a probation period, termination, transfers, notice period and other important aspects of employment. A well-drafted appointment letter can save both the employer and employee from misunderstandings and helps to establish a fair and transparent relationship.

On the date of joining, the employee will get the employment appointment letters, on the letterhead of the company. The employer will retain one copy of the document and the employee will get another copy of the document. To draft a great appointment letter format, use the appointment letter generator from MakeMyDeed. [caption id="attachment_1904" align="aligncenter" width="783"]

Appointment Letter Format

Non-Disclosure Agreement (NDA)

A non-disclosure and non-compete agreement is a legal document usually executed on non-judicial stamp paper, that restricts the use of confidential information. During employment, an employer may have to divulge confidential information, future plans, software codes, client information and other proprietary information to an employee for performing his/her duties. It is important that, do not use the information for purposes other than those intended by the employer. Therefore, a non-disclosure agreement is between the employer and the employee, detailing types of confidential information, the policy for handling confidential information and the responsibilities of the employee for maintaining secrecy.

In general, a non-disclosure agreement has a non-compete clause to restrict an employee from using proprietary information gained during the course of employment to compete against the employer. It is good to include the non-compete clause in the non-disclosure agreement to provide maximum protection for the employer from the misuse of proprietary information by current or past employees. You can download a well-drafted Non-Disclosure Agreement format or generate a non-disclosure agreement for your company using IndiaFilings MakeMyDeed.

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