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
Website development