Startup Companies Avoiding Key Legal Mistakes Checklist

Many startup companies fail not only for business reasons, but because they do not properly address a variety of legal issues. One of the biggest mistakes startup founders make is not involving counsel early in the life of the business. This checklist identifies key legal problems that commonly arise with startups. They can delay or complicate business development or negatively affect the ability of founders to receive proper return on their investment.

1. Selection of the appropriate type of legal entity early in the business development. Keep in mind that many legal forms recommended for traditional businesses might not be the best fit for startups. It is costly and time-consuming to make changes later.

2.  Protect the use of brand names, logos, and domain names before creating value in them.

3. Clearly agree on and properly document founders’ roles and responsibilities.

4.  Develop and implement a comprehensive IP strategy to ensure that the company has and retains essential IP rights.

5. Comply with securities laws when raising capital.

6. Comply with labor and employment laws.

7.  Properly structure any equity compensation plan.

8. Institute a policy for social media, data collection, and other online and mobile activities.

9. Properly document customer, supplier, employee, and other key third-party relationships.

10. Obtain a comprehensive consultation from an experienced business attorney during which you can address all of the above matters.

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.