Explore the decision-making process

I am an entrepreneur, have a business idea/product/service, did research and have a strong basis to believe it is a viable one. Now I want to establish a business. Where do I begin? What should I consider first, second, third?

 

1.      Are you alone in business or do you have partners? If you have partners, do you have a partnership agreement or at least a letter of understanding in writing?

2.      Register a company to protect you from personal liability and properly document the ownership of the business assets

3.      Select the proper legal entity for your business

4.      Decide in which state to incorporate considering the legal requirements of prospective locations

5.      Consider which legal provisions to include in the Certificate of Incorporation

6.      If forming a corporation, decide how many shares you need to authorize not only for present but for possible future purposes (e.g. accepting investments, giving equity compensation to employees/contractors, bringing new partners on board, etc.)

7.      Prepare all corporate organizational and operational documents (Bylaws, Incorporator’s actions, Board of directors’ ratifications, etc.)

8.      Develop a detailed shareholder agreement

9.      If there is more than one founder, consider whether imposing vesting on founders’ shares may be in the interests of all involved

10.  Consider all special features available for the founders’ stock and decide whether you are going to implement it

11.  In which states are you going to conduct business? Consult a business lawyer whether you need to file for an authorization to do business in those states?

12.  Do you need licenses for your business?

13.  Are you retaining the services of independent contractors/employees? Did you familiarize yourself with the state and federal employment laws? Did you document your relationship? Did you address the assignment of intellectual property if being developed?

14.  Did you execute an assignment of intellectual property from individuals to the company with all partners?

15.  Is intellectual property properly registered if it is subject to registration?

16.  What legal documents do you need for your commercial activities (sale agreements, service agreements, licenses, other transactional documents)?

17.  Do you know all regulatory requirements that may be relevant to your business? Did you put certain mechanisms and checks in place to ensure ongoing legal compliance?

18.  Did you have a comprehensive consultation with an experienced business attorney to discuss all above items in detail and receive further guidance to make sure your business goals won’t be disrupted by legal mistakes?

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