Startup Company Checklist

Startup companies face unique challenges in the business world. With the founders often focused on capital raising, product development, and marketing, the legal requirements that come with running a business and becoming an employer are not always prioritized. However, a failure to address these issues could result in significant liability for the company and its founders, halting the business in its tracks before it gets out of the starting gate.

 

The Law Firm of Ekaterina Mouratova, PLLC has compiled this Checklist to identify some of the key considerations for startups and growing businesses. This list should serve as a reference to help startup business owners to navigate the legal complexities of the startup world.

 

Entity Formation

 

Legal Matters

 

Choice of Entity

Forming and Organizing a Corporation

Forming and Organizing a LLC

Tax Issues

Shareholders Agreements and LLC Operating Agreements

Profits Interests

Taxation of Corporations

Taxation of Pass-through Entities

 

Standard Documents

 

Certificate of Incorporation

Shareholder Agreement

By-Laws

Organizational Action by Sole Incorporator

Unanimous Written Consent of the Board in Lieu of Organizational Meeting

LLC Articles of Organization

LLC Operating Agreement

LLC Minutes of Members Meeting

 

Governance and Housekeeping

 

Legal Matters

 

Fiduciary Duties of the Board of Directors

Board Advisers and Corporate Advisory Boards

Dividends, Redemptions, and Stock Purchases

 

Standard Documents and Clauses

 

Stock Ledger

Notice of Board of Directors Meeting

Notice of Stockholders’ Meeting

Minutes of the Board of Directors

Unanimous Written Consent of the Board of Directors

Written Consent of Stockholders

Board Resolutions: Appointing Officers

Board Resolutions: Granting Execution Authority to Officers

Board Resolutions: Ratifying Prior Actions of Officers

Board Resolutions: Holding the Annual Stockholders’ Meeting

Board Resolutions: Filling Director Vacancies

Manager Resolution Template

Member Resolution Template

Board Adviser Agreement

 

State Law Q&As

 

Obtain a comprehensive consultation from a counsel practicing in the jurisdiction

 

Capital Raising and Financing

 

Legal Matters

 

Startup Venture Finance

Startup Seed Financings

Startup Seed Financing Instruments: Convertible Notes and SAFEs

Startup Seed Financing Process: Convertible Notes and SAFEs

General Solicitation and Startup Capital Raising: Guidance and Questions

Road Map for Undertaking a Private Offering

Section 4(a)(2) and Regulation D Private Placements

Form D: Notice of Exempt Offering of Securities

Preferred Stock

Minority Investments

Crowdfunding Offerings Under Section 4(a)(6)

Crowdfunding Intermediaries: Funding Portals and Brokers

Term Sheets

US Equity Offerings in the US: Tax Consequences for Investors

Debt v. Equity: US Tax Classification of Securities

Debt Finance: Debt Securities Versus Syndicated Loans

Lending

Guaranties

Security

 

Standard Documents and Clauses

 

Convertible Note Purchase Agreement with Short-Form Note (Seed-Stage Startup)

Stand-Alone Convertible Note (Seed-Stage Startup)

SAFE: Simple Agreement for Future Equity (Seed-Stage Startup)

Term Sheet: Convertible Note Financing (Seed-Stage Startup)

Term Sheet: SAFE Financing (Seed-Stage Startup)

Board Resolutions: Convertible Note Financing with Note Purchase Agreement (Seed-Stage Startup)

Board Resolutions: Convertible Note Financing with Stand-Alone Notes (Seed-Stage Startup)

Board Resolutions: SAFE Financing (Seed-Stage Startup)

Side Letter: Convertible Note Financing (Seed-Stage Startup)

Side Letter: SAFE Financing (Seed-Stage Startup)

Certificate of Designation of Preferred Stock

Warrant

Engagement Letter: Unregistered Offerings

Subscription Agreement: Private Placement of Equity Securities (Regulation D)

Subscription Agreement: Private Placement of Debt Securities (Regulation D)

Securities Purchase Agreement

Registration Rights Agreement (Section 4(a)(2) Private Placement Form)

Confidentiality Agreement: Early-Stage Business (Pro-Discloser)

Investor Questionnaire

Bad Actor Questionnaire: Rule 506 Offering

Bad Actor (Rule 506(d)) Disqualification Representations and Covenants

Accredited Investor Representation Letter for Rule 506(c) Offering

Purchaser Representative Questionnaire

Blue Sky Filing Cover Letter, Regulation D Rule 506 Offering

General Solicitation (Rule 506(c)) Representations and Covenants for Placement Agency Agreement

Board Resolutions: Unregistered Offering of Common Stock (Regulation D)

Board Resolutions: Unregistered Offering of Debt Securities (Regulation D)

 

Q&As

 

Obtain a comprehensive consultation from a counsel practicing in the jurisdiction

 

Stockholder Relations

 

Legal Matters

 

Stockholders Agreement Commentary

Stockholder Protections

Resales Under Rule 144

Late-Stage Startup Liquidity

Secondary Market Trading of Private Company Shares

Securities Act Restrictive Legends and Rule 144 Sales

 

Standard Documents

 

Stockholders Agreement

Rule 144 Opinion: Non-affiliate Sale of Restricted Shares

Rule 144 Opinion: Affiliate Sale of Restricted Shares

Rule 144 Seller’s Representation Letter: Non-Affiliate Sale of Restricted Securities

Rule 144 Seller’s Representation Letter: Affiliate Sale of Restricted or Control Securities

 

Employees, Independent Contractors and Service Providers

 

Legal Matters

 

Employment Law Issues for Startups, Entrepreneurs and Growing Businesses

Employer Coverage Under Major Federal Labor and Employment Laws

Remedies Under Major Federal Employment Anti-discrimination Laws

Discrimination Law

Wage and Hour Law

Background Check

Independent Contractor Classification

Business Immigration Sponsorship

Health and Safety in the Workplace

Employee Handbooks

State Minimum Wage

Paid Sick Leave State and Local Laws

Protection of Employers’ Trade Secrets and Confidential Information

Rightsourcing: Seeking a Balance Between Insourcing and Outsourcing

Temporary Staffing Firms and the ACA’s Employer Mandate

Payroll (FICA) Taxes

Negotiating an Executive Employment Agreement

 

Standard Documents and Clauses

 

Executive Employment Agreement

Executive Offer Letter

Executive Employment Agreement Term Sheet

Board Resolutions: Approving an Executive Employment Agreement

Section 409A Employment Agreement Provisions

Offer Letter/Short-Form Employment Agreement for a Non-Executive

Offer Letter for a Commission Salesperson

Independent Contractor/Consultant Agreement

Professional Services Agreement

Freelance Contributor Agreement

Employee Non-Compete Agreement

Non-Solicitation Clause

Employee Confidentiality and Proprietary Rights Agreement

HIPAA Business Associate Agreement

Anti-Harassment Policy

Equal Employment Opportunity Policy

 

Employee Benefits and Compensation

 

Legal Matters

 

Employee Benefits Law

Choosing the Right Type of Equity Compensation for Startup Company Employees

Stock Options and Other Equity Compensation

Profits Interests

Startup Equity Awards: Securities Law Considerations

Employee Incentive Compensation and the Role of Rule 701

Issuance of Cheap Stock

Drafting an Equity Incentive Plan for a Private Company

Overview of the Taxation of Equity Compensation Awards

Section 409A: Deferred Compensation Tax Rules: Overview

Cafeteria Plans

Defined Contribution Health Plans

Health Insurance Exchange and Related Requirements Under the ACA

Pre-approved Plans: Design Choices, Tax-Qualification Rules and Best Practices

Requirements for Qualified Retirement Plans

Safe Harbor 401(k) Plans

Retirement Plans for Small Employers

Voluntary Benefits

 

Standard Documents

 

Equity Incentive Plan

Annual Cash Bonus Plan

Nonqualified Deferred Compensation Plan

Profits Interest Award Agreement

Profits Interest Plan

Board Resolutions: Approving an Equity Incentive Plan

Board Resolutions: Adopting a Nonqualified Deferred Compensation Plan

Model Exchange Notice for Employers Who Do Not Offer a Health Plan

Model Exchange Notice for Employers Who Offer Health Plan Coverage to Some or All Employees

 

Intellectual Property and Technology

 

Intellectual Property (General)

 

Legal Matters

 

Intellectual Property Rights: The Key Issues

Trademark

Copyright

Patent

Confidentiality and Nondisclosure Agreements

 

Standard Documents

 

Confidentiality and Nondisclosure Agreements

 

Acquiring Intellectual Property Rights

 

Legal Matters

 

IP Licenses: Restrictions on Assignment and Change of Control

Acquiring Trademark Rights and Registrations

Trademark Searching and Clearance

International Trademark Protection

Trade Dress Protection

Trademark License Agreements

Patent License Agreements

Data as IP and Data License Agreements

Assignment of Employee Inventions

 

Standard Documents

 

Intellectual Property Assignment Agreement

Copyright Acquisition Agreement

Patent Assignment Agreement

Patent License Agreement

Corporate Patent Policy

Trademark Acquisition Agreement

IP Rights Clauses for Employee Agreements

Software Assignment and Grant-back License Agreement

Domain Name Transfer Agreement

Joint Development Agreement

Confidentiality Agreement

 

Software and IT Policies

 

Legal Matters

 

Legal Protection of Software

Open-Source Software

Children’s Online Privacy: COPPA Compliance

Digital Millennium Copyright Act (DMCA): Safe Harbors for Online Service Providers

Software as a Service (SaaS) Agreements

 

Standard Documents and Clauses

 

Open Source Software Policy

IT Resources and Communications Systems Policy

Website Hosting Agreement

Website Development Agreement

Website Privacy Policy

Website Copyright/DMCA Policy

Website Terms of Use

Children’s (COPPA) Privacy Policy Notice

Software License Agreement

Software as a Service (SaaS) Agreement

Software/SaaS Support Service Level Agreement

Software Evaluation License Agreement

Data Security Contract Clauses for Service Provider Arrangements

 

Product Development, Advertising, Marketing and Sales

 

Legal Matters

 

Supply Chain

Manufacturing Custom-Made Goods in the United States

Product Labeling

Distributors and Dealers

Consumer Protection

Advertising

Online Advertising and Marketing

Direct Marketing

Internet Brand Protection

Mobile App Development and Distribution

The Payment Card System

E-Commerce Payment Mechanisms

The Global Supplier: Dealing with Third Parties in Supply Agreements

Export Regulations: EAR, ITAR, and FTR

Export Regulation: OFAC Economic and Trade Sanctions

 

Standard Documents

 

General Terms and Conditions for the Sale of Goods and Services

Letter of Intent: Commercial Transaction

Manufacturing Supply Agreement

Distribution Agreement

Sale of Goods Agreement

Advertising Agency Agreement

Advertising Agreement

Promotion and Marketing Agreement

Publicity Waiver and Release

Event Sponsorship Agreement

Mobile App End User License Agreement (EULA)

Mobile Application Privacy Disclosure

Mobile Application Privacy Policy

 

Data Privacy, Internet and Social Media Issues

 

Legal Matters

 

US Privacy and Data Security Law

Social Media in the Hiring Process

Employer Access to Social Media Accounts

Employees and Social Media: Company Best Practices

Monitoring and Responding to Third Party Use of Social Media

CAN-SPAM Act Compliance

 

Standard Documents

 

Social Media Policy

Company Social Media Use Guidelines

Employer Ownership of Social Media Accounts Clauses

Bring Your Own Device to Work (BYOD) Policy

 

Real Estate and Leasing Issues

 

Legal Matters

 

Office Lease

Office Leasing: Letters of Intent

Assignment and Subleasing

Key Issues in Startup and Technology Company Leasing

Taxation of Commercial Real Estate Leases

Owning and Leasing Green Real Estate

Options for Additional Space in Commercial Leases

 

Standard Documents

 

Office Leasing: Letter of Intent

Office Leasing: Agreement of Lease

Office Sublease

Industrial/Warehouse Lease

Office Leasing: Guaranty of Lease

Office Leasing: Schedule of Operating Expenses Exclusions

Office Leasing: Summary Chart

Commercial Lease Summary Chart

 

Insurance Issues

 

Legal Matters

 

Insurance Policies and Coverage

Directors and Officers Liability Insurance Policies

Commercial General Liability Insurance Policies: Property Damage and Bodily Injury Coverage (Coverage A)

Commercial General Liability Insurance Policies: Personal and Advertising Injury Coverage (Coverage B)

Advertising Injury Insurance Coverage for Patent, Copyright and Trademark Claims

Cyber Insurance: Insuring for Data Breach Risk

 

Property and Liability Insurance in Real Estate Transactions

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