However, it can be much harder to prove that something is actually your intellectual property unless you have legal protection. For example, someone might claim they had a name or idea before you. In addition, you can only receive legal rewards in a lawsuit if you have actually registered for intellectual property protection. Once you`ve gone through this checklist, consulted with a licensed professional in your state, and put your basic legal protection in place, don`t add unnecessary layers of complexity. Depending on your type of business and location, you may need certain business licenses and permits from your country, state, county, or city. Licensing, approvals, and registrations come in many variations. Examples include local business permits, building permits, health safety permits, home business permits, fire safety permits, industry-specific permits (e.g., operating a law firm, hospitality, construction, or manufacturing), liquor licenses, etc. For example, if you have a shop window or desk and your clients visit you in that room, there`s a good chance they`ll slip and fall. If a customer is injured in your business, they could potentially sue your business. If successful, you could be held legally liable and forced to bear the cost of the damage caused by that fall. But why is a mission statement included in a legal checklist? I write about startups, venture capital, mergers and acquisitions, and internet companies.
I am Managing Director and Global Head of M&A for VantagePoint Capital All startups should be organized as a formal business unit. Proper business formation limits owners` personal liability for business obligations and can have significant tax implications: Most startups start their business journey as a sole proprietorship, which doesn`t require any additional fees or paperwork other than a standard business license. However, the individual farm has its drawbacks. For example, there can only be one owner. Plus, you can`t attract additional capital from an investor – instead, you`ll need to change the structure of your business to form a partnership. All these objectives are legitimate for a company. No end goal is better than the other. It`s just important to understand what works for you and your future so you can have that as a basis for all your future legal decisions. Liability is a risk for which you can be held legally liable.
To protect yourself and those who work with or for you, you need to prioritize your legal documentation. These documents are agreements such as a partnership agreement, confidentiality agreements, payment agreements, employee agreements, secrecy, etc. Another important documentation you need to keep in mind is that of contracts. Contracts help protect your assets as well as your business, and they are essential for any type of business. In a misguided effort to cut costs, start-ups often hire inexperienced legal advisors, including lawyers who are friends or relatives, or those who offer significant fee discounts. In doing so, founders dispense with the advice of experienced legal advisors, who can help avoid many legal problems. Founders should consider interviewing multiple lawyers or law firms and determining whether the lawyers or law firms have expertise in some, if not all, of the following areas of law: Starting a new business is an exciting event – in fact, it can be so exciting that people sometimes forget to consider some basic legal steps when starting their business. Here are some tips to keep in mind in order to avoid some basic legal mistakes. Once you`ve taken the basic steps to start your business, and you`ve adequately protected yourself from a legal perspective, it`s important to focus on your actual business. If you`re starting your business with co-founders, you should agree on the details of your business relationship early on. Failure to do so can lead to significant legal issues (a good example of this is the infamous Zuckerberg/Winklevoss Facebook dispute).
Think of the founder`s contract as a kind of „marriage contract.“ Here are the main terms that your written agreement with the founder should take into account: There is no protection for the sole proprietorship, which means that commercial creditors can sue you. That`s why it`s important to choose the right business structure from the start and make sure your business and assets are protected by law. Deciding to register your business as a corporation or LLC (limited liability company) may be a better option for your startup. One important thing to keep in mind, even if you have a lawyer writing or reviewing your contracts, it is still your responsibility to read and understand what`s in the contract. The lawyer can point out legal issues to you, but a contract is ultimately a business decision. As the business owner, you are the one who exchanges the promises in the contract. You must therefore make sure that you are satisfied with all the promises exchanged in this contract. I write about startups, venture capital, mergers and acquisitions, and internet companies. I am Managing Director and Global Head of M&A at VantagePoint Capital Partners, a leading venture capital fund in the San Francisco area. As a venture capitalist, I focus on investing in internet and digital media companies.
I am the author of several books on startups and entrepreneurship. I am also the founder or co-founder of several Internet companies that I have sold to NBC Interactive, LexisNexis and D&B. I`m the co-author of Poker for Dummies and a Wall Street Journal bestseller on small businesses. I was also a partner at the law firm Orrick, Herrington & Sutcliffe with experience in startups, mergers and acquisitions, strategic alliances and venture capital. If you already have a contract, downloaded it from a legal website, drafted it yourself, or was presented to you by an owner or seller, you can ask a lawyer to review it. Ellen Ehrenpreis is a tech startup partner at Orrick in Silicon Valley. She has spent over twenty years in the technology and venture capital ecosystem, leveraging her extensive network and deep understanding of the technology industry and legal landscape to effectively and strategically advise emerging companies and investors on a variety of critical needs. On the corporate side, Ellen`s clients range from start-ups to mature private companies.