What legal documents must be signed between a business and their distributor in order to protect the business?

The parties should have a thorough distributor agreement. This agreement should provide the risk allocation terms including indemnification and other related strategies. This would also include, if necessary, confidentiality and other trade secret and intellectual property terms.

You should contact a business attorney to review your business, the intellectual property, and determine the best strategy to protect your business.

DISCLAIMER—This answer is for informational purposes only and discusses general legal principles, trends, and considerations and is not intended as specific legal advice regarding your question. This answer does not establish an attorney client relationship.

A business entrusting the distribution of their product to another company first needs to make sure its rights to its product are fully protected, by trademarking the goods, as applicable. Due diligence has to be done on any distributor, as the distributor is in a position to take big advantake of being the party responsible for accounting to the business.

The business needs to contractually provide for preservation of the integrity of the product's manufacture, packaging, delivery, and quality control standards. It needs to protect its branding, trade dress, and trademark, which are also subject to strict quality control and restrictions on use.

The business needs strict financial controls, including getting the distributor to commit to a minimum amount of advertising, which should be subject to the product owner's approval, and an advance against sales as well as sales minimums to allow the distributor to continue distribution, and definite accounting and payment provisions, subject to audit rights.

To the extent that the business is sharing trade secrets and confidential information, those need to be contractually limited as well.

This type of relationship should not be done on a handshake. It requires a lawyer's input, and lots of enforcement mechanisms.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

You need a distribution agreement that, in addition to specific business terms, has specific terms to handle any intellectual property (patents, trademarks, Copyright, trade secrets) that maybe owned by the parties.
A Intellectual Property attorney, such as myself, can draft the distribution contract you require.