Legal guidance may not be uppermost in your mind, as a new entrepreneur just putting together your first startup. After all, you’re pretty smart – you came up with a brilliant business idea, right? And, don’t you have great instincts when it comes to connecting the dots between creativity and function?
You may very well be a master of the industry innovation you’re preparing to launch, and handling your finances is accomplished in the blink of an eye. That said, the one thing many entrepreneurs fail to recognise is: they can’t do it all alone, not as well anyway, your startup needs a lawyer.
Reaching out – for advice, support, and certainly the legal guidance that will preempt the kinds of issues that threaten to capsize your venture – is a humble, and very wise move.
Why your startup needs a lawyer?
Choosing the Right Company Structure
Are you planning to be a Sole Trader, incorporate a Limited Company, or create one of several available types of Partnerships? Do you know the differences between them, and the pros and cons of each?
There are many steps to climb before you plunge into the deep end of a startup pool. Making the correct decision, as to which business structure is best for you and the type of establishment you are going to open, is essential. Consulting with a business lawyer is vital, as is their assistance with drawing up the appropriate shared-owner agreements.
Staving Off Issues with Multiple Owners
Shared-ownership agreements can be the lifeblood of a partnership. Fairly apportioned responsibilities (both financial and work-wise) must be outlined clearly, to avoid conflicts that could pull the company apart. There are pros and cons to partnerships, and a few ideal traits to look for if you’re planning on going down this path.
There will always be differences of opinion, but as long as there are lines of demarcation, the business should be in good shape. Each owner should bring value to the enterprise, whether it is capital contribution, leadership skills or industry expertise. When investors are contacted for potential buy-ins, they will want to know the partnership is stable and adaptable to innovations which can increase profits.
Securing an Appropriate Business Premise
Is the property zoned for your industry? Don’t rely solely on the landlord’s statements; this could easily be a costly mistake. Are there use restrictions, noise guidelines or other regulations to consider? Might those interfere with your ability to run your business, or affect the customers who will frequent the shop? A solicitor specialising in commercial law contracts should absolutely review the lease for your protection.
Finding the best place to set up shop is one of your first steps, and necessary before many other tasks can be initiated. If the location is not reasonable for your employees’ commute, they may begin to look for other opportunities closer to home. When the surrounding stores appeal to the same consumer you’re looking for, it could be worth a little more in price – consider it as marketing money well spent.
Setting Up Your Hire Contracts and Policies
There are dozens of boxes to be checked, to make sure you’re following the legal regulations associated with employing staff. From sending the candidate a hire agreement, to ensuring you are paying them the appropriate minimum wage (whether they are an employee or an offshore contractor), it’s an area in which problems can rage out of your control rather quickly.
It’s also a good idea to have a financial consultation with an accountant prior to adding employees, to make certain the cash flow is on point for taking on these recurring expenses. Though independent contractors are easily secured and dismissed, a regular employee also has rights which need to be adhered to and considered.
Creating a Proper Services Agreement
Many new companies, as well as those established for some time, make the mistaking of over promising and underfulfilling when it comes to trying to secure or keep their customers. If you aren’t using a relevant services agreement, you’re leaving yourself open to the liability of claims and lawsuits.
Beyond the legalities, it’s just not good business to consistently move your deadlines further out, or continually add on costs beyond the original proposal. Even if the additional expense is a valid one – if you don’t have everything in writing at the onset, the client is going to argue the point and could potentially sue for damages these exceptions have caused.