When you think of an idea you believe will change the world for the better, the excitement can be unstoppable.
However, instead of jumping around and getting ahead of yourself, you need to make sure you’ve got all your legal ducks in a row and a clear vision of how you want to develop – at least for now.
Choosing A Name
When you decide on a name you think perfectly describes your business, you’ve got to protect it. Intellectual Property (IP) is an interesting area of law and is extremely relevant for startups and entrepreneurs. Protecting your IP by trademark enables you to protect your brand by preventing others from using it for themselves.
However, you do need to make sure the name is available. This may sound obvious, but not conducting a trademark search will cost you. In the startup world, IP disputes are common as entrepreneurs compete for ground over their ideas and their brands. Get ahead of the curve by getting yours sorted.
Choosing A Business Structure And Tax
Amid the excitement of coming up with an idea you may forget that you need to think about what kind of business you want to create. Are you going to be a Sole Trader? Form a Partnership? Limited Liability Partnership? Or incorporate a Limited Liability Company (LLC)?
Each business structure will offer different benefits depending on what your business does. Do your research on the most suitable business structure. It is essential that you speak to an accountant or tax lawyer; understand the structure and nature of your company, and comply with corresponding tax obligations.
Tax can be a nuisance; fraud can be an even larger one.
Shareholders Agreement, Employment Agreements, And Other Contracts
Getting your contracts nailed down is probably the most important legal aspect of starting a business. In fact, not doing this is one of the biggest mistakes startup founders make. For those not in the legal know – a contract is an agreement between two or more people to conduct their business in a certain manner and on certain terms.
There are multiple contracts you will need when first starting out. The two most important? A Shareholders Agreement and Terms and Conditions of Business. A Shareholders Agreement is vital for regulating your relationship with your co-founders or investors, while a Terms and Conditions helps inform your customers of your responsibilities to them and theirs to you.
All of these basic contracts (maybe not the shipping one!) can be drafted simply and cheaply – the key point is that this actually happens! There is a high chance that at some stage, you will have a disgruntled client/employee/director. If you can point to a valid contract at that moment, that details the rights, obligations and liabilities of all parties, chances are the dispute can be settled quickly and easily with no-one being sued.
Doing this will save you money and legal issues in the future.
Knowing If Your Business Is Regulated
Depending on the nature of your business, a different body will regulate your actions. Are you in Fintech? Get to know the FCA. The latest legal startup? The SRA is your friend. Taking on the ad world? The ASA is where you want to turn. More than a series of letters, these are national bodies that will govern your area of work: Without their sanction, you won’t legally be allowed to function.
Final Words On Startup Law Essentials
Being sure that your startup is following all key startup law requirements isn’t a should, it’s a MUST.
If you need any further help ensuring your startup complies with all startup law requirements, book now a call with our legal team and we will guide you through every stage of your legal needs.