As an aspiring entrepreneur, there’s nothing more fun and exciting than founding your own startup. However, just like other major undertakings in life, you may have to go through a lot of processes when starting your own company to ensure you’re doing it right. One of the important aspects you shouldn’t neglect is the legal priorities aspects of building a startup.
By learning about what should be prioritized legally, you’re able to navigate the different processes efficiently, reduce the risk of making costly mistakes, and ensure the success of your startup business.
Thus, if you’re planning to build your own startup, below are six legal priorities to consider from the get-go:
Legal Structure Of Your Business
One of the important legal priorities that you should consider is the legal structure of your startup. Typically, the way you choose your startup’s legal structure can impact the way you run your business, including the management of assets, dealing with monetary liabilities, and many more. Also, your chosen legal structure can affect the way you pay your taxes and other financial obligations.
For startups, the following are the common legal structures widely used in the industry:
- Sole proprietorship
- Limited partnership
- Limited Liability Company
Thus, to know which legal structure is right for your startup, you should consider which type of tax structure is appropriate for your business as well as the potential liability issues that are associated with your company. To help you with the decision-making process, you may contact a reliable lawyer to provide you with valuable legal advice about startups and the laws surrounding them.
As a first-time startup owner, it’s also important to prioritize the necessary legal documentation so you can protect yourself and those who’ll be working for you. When founding a startup company, you should make sure that all legal documents are in order. These documents can include the following:
- Partnership agreements
- Confidentiality agreements
- Employee agreements
- Payment agreements
- Non-disclosure agreements
Aside from the legal agreements mentioned above, you should ensure that your contracts are drafted to protect your business interests. For example, if you enter into a contract with your investors, employees, and customers, be sure it’s legally binding among the parties involved. Having a contract makes it easy to take legal measures against the other party in case the latter won’t abide by the terms and conditions of your agreement.
Licenses And Permits
When founding a startup, you’ll need to comply with many types of licenses or permits before you can legally operate your business. While the number of licenses varies depending on the kind of business you have, the most common licenses that you should familiarize are business licenses, sales tax permits, trading licenses, and a lot more.
For example, if your startup offers food services, you may have to register with the local governing body that regulates food standards and health and safety measures.
Hence, if you want to avoid any legal trouble with your startups’ licensing requirements, it’s essential to do some research by contacting local government agencies. As such, you’ll know more about the specific licenses you’re required to comply with in order to legally operate your business.
Another legal matter that you should prioritize is the trademark of your startup business. Primarily, a trademark refers to a type of intellectual property involving an expression and design that distinguishes certain products or services from those of others. Because of this, it’s important to carefully select your trademark to avoid any legal trouble. This can be done by conducting a meticulous search online.
For instance, you should check if there’s another business entity operating under the trademark you want to use for your startup. That way, you can prevent any infringement upon other businesses’ trademarks, which may result in a trademark opposition action.
Thus, if you’ve come up with a unique trademark for your startup, make sure to register your business name and logo as your official trademark. In doing so, you can also stop other entities from registering their company using the same trademark you have.
To legally set up your company and operate, you should also consider the zoning laws as one of your legal priorities. When dealing with zoning laws, you need to ensure that the location you choose for your startup is properly zoned for the type of business you want to be in.
To avoid any legal issues with the local governing body, it’s best not to make a wrong assumption that your zoning is proper for your business. There are instances wherein the zoning laws may change even if other similar establishments in the area were open and operating. As such, you should perform thorough research by asking the designated local government bodies whether you can open your startup in a certain area without violating the zoning laws.
Another legal matter that should be prioritized when founding a startup is insurance. Typically, most local government authorities require businesses to carry liability insurance coverage for legal purposes. As a legal requirement, having insurance coverage can help you avoid fines as well as protect you from potential compensation claims initiated by employees and other third parties.
So, if you want to ensure the safety of your startups against claims, you should consider taking insurance coverage as one of your primary legal priorities. That way, you can have peace of mind knowing that your business is protected.
Indeed, starting up a business can be a complicated process, especially when it comes to its legal aspects. Therefore, if you want to sort things out, you shouldn’t hesitate to hire a lawyer who can assist you in dealing with the legal priorities mentioned above.
Remember, there are plenty of legal concerns that should be taken into consideration. To safeguard yourself against any legal trouble, be sure to follow certain rules being imposed by the government authorities so you can operate your startup without any hassle.
Founder Dinis Guarda
IntelligentHQ Your New Business Network.
IntelligentHQ is a Business network and an expert source for finance, capital markets and intelligence for thousands of global business professionals, startups, and companies.
We exist at the point of intersection between technology, social media, finance and innovation.
IntelligentHQ leverages innovation and scale of social digital technology, analytics, news and distribution to create an unparalleled, full digital medium and social business network spectrum.
IntelligentHQ is working hard, to become a trusted, and indispensable source of business news and analytics, within financial services and its associated supply chains and ecosystems.