The 8 Legal Documents You Need To Open And Run Your Marketing Agency  


Are you launching your own marketing agency?

As the owner of a new small business, it’s important to ensure that you protect the company and yourself with legal documents. These materials will help you in your work with clients, freelancers, partners and suppliers.

Having a legal advisor helps ensure that your contracts and other documents are protecting your business interests, your personal liability and the day-to-day operations of your company.

Here is a look at 8 legal documents you need to launch and run your marketing agency.

  1. Business Plan

Creating a business plan is an important step to take, especially if you’re seeking financing from banks or private investors. A business plan is a detailed analysis of your company from multiple vantage points.

Key elements of your business plan should include:

  • Executive Summary. Outline of your business name, purpose, goals and products and services offered
  • Company Description. Detailed description of the goals, products and services. Also differentiates your business from your competitors
  • Market Analysis. Detailed, research-based insights into your market, competition and customers. Includes demographics, market share analysis, growth rates and segmentation analysis
  • Organization and Leadership. Explores how your business is structured and details of the core leadership, including bios and qualifications
  • Products and Services. Detailed descriptions of the products and services you will offer, how they will be made or sourced, how they are different from those offered by competitors and pricing strategy
  • Marketing Strategy. How you will sell your products and services, including the channels to be used and promotional strategies
  • Financial Plan. Proposed budget, projected and actual financial and income statements, balance sheets and cash flow documents
  • Background. Data, reports and insights used to develop the previous sections
  1. Business Structure Documentation

Your marketing agency will need to determine its business structure. The business structure is the formal, legal way in which your firm will operate.

There are multiple options for your business structure. However, for marketing agencies, the two most common options are a sole proprietorship or a limited liability company (LLC).

Sole Proprietorship

In a sole proprietorship, the lone owner makes all business decisions. It is a simple structure and requires no formal paperwork to file as this business type.

A sole proprietorship is known as a pass-through entity. The profits and losses from the marketing agency flow through from the business to the owners’ individual tax returns.

The major risk of a sole proprietorship is liability exposure. The structure does not provide the owner with liability protection. If there is a court judgment against the company, the owner’s personal assets, including property, cars and savings, could be seized.

The LLC structure is one that is very popular with small-business owners. The LLC has the same tax structure with the owner or owners recording tax information on their individual tax returns.

With an LLC, you have greater flexibility in how you manage your agency. You also have liability protection. Except in cases of gross negligence, your personal assets are protected from claimants.

If you opt to run your business as an LLC, state and IRS rules apply for how it is operated. You or another owner can choose to run the business yourselves or hire a manager to make the day-to-day decisions.

An LLC operating agreement often needs to be filed with state paperwork. Among the components are:

  • Owner names
  • How the LLC will be managed
  • Each owner’s responsibilities and obligations to the LLC
  • How the LLC will be taxed (either as a partnership or corporation)

If you choose an LLC, you will need to register your agency with a state agency. If registering your business as an LLC, it’s a smart idea to work with a partner who will manage both the initial and annual filings necessary to maintain your LLC status.

  1. Business Licenses

You may need to file for licenses to launch your marketing agency. Not every state requires a business license and the process for filing for a license can vary greatly. You may also need a license at the local level to operate your agency in a municipality.

Here are two of the common business license types:

  • General Business License. These basic licenses are often required to operate a commercial or home-based agency. Costs are usually nominal but vary by state. Renewals usually are annual but some states allow for multi-year licenses
  • DBA License. A “doing business as” license allows you to use a unique name for your agency. A DBA name is different from the legal name you may file with your LLC documentation. The DBA name is usually the public-facing, commercial name used on storefronts, signage, websites, business cards and social media
  1. Tax and Employment Items

You will need to obtain several important documents that allow you to hire employees and sell products or services.

An Employer Identification Number (EIN) is a unique identifier that is used on tax forms and other legal documents. It’s also necessary to hire employees. The EIN is easy to obtain from the federal government and is the business analog to a Social Security number.

A sales tax license is a state-issued document that is required in many states if you’re going to sell items above a certain threshold. You will need to collect taxes from your customers and pay your state, usually on a quarterly basis.

  1. Master Service Agreement

Your marketing agency will be working with multiple clients. With a master service agreement, you can define the standard terms related to your work with clients.

The agreement spells out in detail common issues related to marketing agency work, including:

  • Ownership. Who will own the work output you create? How will it be transferred or licensed to your clients?
  • Invoicing. Determines how frequently invoices will be issued and the payment terms
  • Confidentiality. Lays out terms of non-disclosure of the intellectual property you produce
  • Liability. Spells out that the client will be responsible for third-party expenses related to your work on their behalf
  • Indemnification and Liability. Provides protection for your agency and employees for issues that may arise related to your work
  • Termination. Determines the guidelines for ending a business relationship
  • Dispute Resolution. Documents how business disputes will be resolved between your agency and a client
  1. Partnership Agreement

If you are the sole owner of your marketing agency, a partnership agreement is not necessary. However, if you have partners in your agency, a partnership agreement is an important document to create.

A partnership agreement spells out responsibilities, roles and financial terms among the partners. It’s critical to establish these terms before your agency opens for business.

Partnership agreements are especially helpful in resolving disputes that may arise.

The core elements include:

  • Partner names
  • Partnership duration
  • What each partner contributes to the partnership, including finances, land, real estate and equipment
  • How labor and decision-making is divided among the partners
  • How new partners may be added to the partnership
  • What happens if a partner dies or leaves the partnership
  1. Employment Agreement

If you are hiring employees or freelancers, it’s important to have an employment agreement in place. The agreement spells out the terms of the relationship, including:

  • Salary, wages or other forms of compensation
  • Benefits offered
  • Roles and responsibilities
  • Position title
  • Working hours
  • Confidentiality stipulations
  • Non-compete and non-solicitation clauses
  • Termination and notice guidelines

Similarly, if you are hiring freelancers, you want to have an independent contractor agreement in place, which will contain many of the same terms.

If you are hiring employees, you also may want to produce an employee handbook. The handbook lays out important policies and guidelines you expect employees to follow.

Some of the handbook elements are the same as in an employment agreement. Among the most common elements of an employee handbook are:

  • Benefits
  • Vacation and leave policies
  • Compensation
  • Working hours
  • Anti-discrimination and harassment policies
  • Safety and security
  • Conduct standards
  • Professional development

Employees are usually required to sign a form acknowledging that they have read the handbook.

  1. Terms of Service and Privacy Policy

If your agency will have a website, you will want to establish terms of service and a privacy policy.

The terms of service lay out how a visitor can use your website or app. The privacy policy explicitly illustrates how visitor data will be used. These are important documents, especially given the increasing regulatory mandates related to data usage and privacy.

With careful planning, you can have the key documents in place to shape how your marketing agency will function. Spending the time to create these documents will position your agency for future success.