You have a new product or service to serve a market need and have developed a business plan.
You’ll need the right legal services from the very beginning to grow your startup and to ensure success.
Hire a startup lawyer with a successful track record
You need a business lawyer who has a successful track record in helping startups grow their business.
The lawyer will have advised many other startups, and understands the challenges and the risks that you will be facing. You should look for an experienced lawyer who knows your industry.
Get in touch with the lawyer and ask for details of services and fees. You should think about which lawyer is likely to add the most value to your business, and start building a business relationship with the lawyer early on.
Make sure your business is legal
Your lawyer should review the proposed business plan to make sure that the business will comply with relevant laws and regulations.
An experienced startup lawyer will be able to do that quickly. Laws and regulations can cover a wide range of matters such as company filings, employment matters, and sale of goods and services.
You will not want to be waiting for relevant approvals and permits to come through at crucial stages for your startup.
Once you’ve had the review, you can be assured that there will be no legal nor regulatory issues to delay the progress and development of your business. You can implement your business plan with the knowledge of the risks, and with the information on how best to mitigate those risks.
Incorporate your company
A private limited company will usually be most appropriate business structure. You should incorporate your company early on, once you have started working on your business plan.
Once the company has been formed, you can start separating the assets and liabilities of the business from your own.
Your lawyer should advise you on the key features of a private limited company, and if appropriate, alternative business structures. The structure of your business is not just a formality, as it will affect your personal liability and taxation.
Protect your personal assets
You will want to be advised by an experienced lawyer on how best to protect your personal assets and the legal consequences of key contracts. You will want your business to be appropriately structured to protect your own personal, non-business assets.
You will want to carefully consider any contracts that you sign on a personal basis, such as personal guarantees.
Protect your business know-how and ideas
You will want to protect the business know-how and ideas of your startup. Your lawyer will help you protect trade secrets by preparing appropriate confidentiality agreements.
You may have intellectual property (IP) – business assets that could be registered as patents, copyright or trademarks. You will want to register the IP, which is vital as a source of your business growth, to establish its ownership. You will need to do that to protect your business and to obtain funding from investors.
You will also want to be advised on your co-founders and employees signing non-competition agreements.
Manage your startup
An important part of managing your startup is proper legal documentation. The shareholders’ agreement and the articles of association provide the roadmap to running your business.
They provide a legal basis for how decisions will be made and differences resolved, how to handle ownership changes and how to issue new shares.
An experienced startup lawyer will ensure that your shareholders’ agreement and the articles of association are written appropriately for your business.
Be clear what founders do and want
Turning an idea into a business often needs a number of founders to combine their skills, connections and assets. Founders bring an essential business need to the company and receive a significant portion of the equity.
Your lawyer will be required to prepare and advise you on legal contracts with co-founders. The agreements should cover each person’s role in the business, ownership stake, remuneration and leaving provisions.
As your business grows, you will be hiring employees with certain skills and connections. Employees will be paid for their time, and may also receive some equity.
The company will need employees to sign employment contracts. The employment agreements should clearly set out the terms of employment, such as the role, the remuneration and the dismissal process. At some point, the startup will need to involve a human resources professional.
The initial money for the startup will have come from your own funds, or from family and friends. That seed capital will have been used to buy equipment, rent office space, make your first few hires and pay other costs.
Your startup will be ready to raise capital once you have the business plan dealing with how your product or service will be launched into the relevant market.
Potential investors will want to see in the business plan, the opportunity for growth and profit for your startup.
Your goal will be to raise enough money until your next funding round.
Your lawyer will have a key role in helping you prepare the investment agreement and other documentation with your investors, and with the process of getting funding more generally.
Business to business contracts
You will need to deal with business to business contracts on a day-to-day basis. These contracts may one-off contracts or standard contracts that will be used over and over.Business to business contracts have a key role in specifying the rights and obligations of the business.
They should be prepared to reduce legal disputes, ensure payment and provide a clear course of action if one party does not hold up their end of the deal. You should ask for help from your lawyer on the contracts your business needs.
If you're looking for legal advice for your start up then get in touch.