Top 8 reasons why you need a lawyer for your startup business

 

Top 8 reasons why you need a lawyer for your startup business.

When you start a business, you have to focus almost entirely on getting your product or service out to the market.

Getting your business up and running it is a priority, but it’s also important to think about the legal implications of your business strategy. Consulting a startup lawyer will help you avoid adverse legal consequences.

Why you need a lawyer to startup your business
Why you need a lawyer to startup your business

A Lawyer for your startup business can help you with:

1. If you’ve got multiple founders

A startup lawyer can help you negotiate the ownership, which is important if you have multiple founders, and each founder has different responsibilities.

A lawyer should help you to recognize potential issues and be able to draft an agreement between the founders so that everyone will have a reasonable expectation, about what will occur if things don’t go as hoped for.

2. If you’re raising capital

In case you decide to raise your company capital, a lawyer can be a big help for your startup business because he will keep you away from the problems with the Securities and Exchange Commission. There are all sorts of complex securities laws, both new and established, about publicly and privately raising capital in exchange for ownership interests.

3. Employment Issues

As your business grows, you’ll start hiring employees and contractors.

For every new employee, you’ll want to draft an employment agreement. The employment agreement contains the terms and conditions of your employees employment with the company. A few important considerations in employee agreements include: assignment of any intellectual property created by the employee, confidentiality obligations and non-compete clauses.

Keep in mind that there are strict compensation requirements, such as minimum wage laws, with which you must comply. These extend even to unpaid internship. A startup lawyer can help you with the do’s, don’ts, restrictions and conditions of employee contracts.

4. If you’re dealing with intellectual property

It’s important to protect the ownership of your intellectual property, and lawyers can help with that by getting the ball rolling on protecting trademarks, patents, copyrights, and trade secrets.

 5. Incorporation

Incorporating your business creates a legal separation between the individual entrepreneur(s) and the business itself, possibly shielding you from personal liability for the business’s debts and other liabilities. Think of your entity as an independent vessel that conducts business: it holds IP, employs talent, pays taxes and enters into contracts. The primary party to any transaction relating to the business is the entity, and not the founders themselves.

There are several forms of business organizations, including a Sole Proprietorship, a Partnership, a Limited Liability Corporation (LLC) or a Corporation. Your startup lawyer can help you decide on a structure based on your business, finances, plans and goals.

6.  Protecting your Brand’s Identity

You may have also spent a significant amount of time, energy and resources in building and gaining recognition of your brand name. A great way to protect your brand name or logo is by registering it as a trademark. A distinctive word, phrase, symbol or design qualifies a trademark that you can register with the U.S. Patent and Trademark Office.

Although registration isn’t necessary to protect a trademark, it operates as first hand proof of ownership and permits you to bring a suit in Federal Court. Succeeding in an application for a trademark depends on several factors, which your trademark attorney will work with you to satisfy.

7. Generating Website Documents and Dealing with Data Privacy Issues

If any part of your business model involves the use of a website, you should consider implementing user agreements. These agreements detail the user code of conduct, disclaimers of warranties by the website and disclaiming liability for any links to third party sites. In addition to user agreements, most websites will also include a privacy policy, detailing how your company uses, processes, stores and shares data. In fact, some states, such as California, require any website that collects personal information about state residents to conspicuously display a Privacy Policy on its website. You should enlist an attorney to draft these agreements and policies because inaccuracies may result in action by the Federal Trade Commission.

8. Complying with SEC Regulations

When issuing stock of your company, complying with State and Federal Securities Regulations is of paramount importance. Typically, any issuance of an equity instruments, whether to founders, seed investors, to venture capitalists or as stock options, must be registered with the relevant securities authority. To avoid registration, the issuance must fall within one of several exemptions from registration, based on a variety of factors including the value of the securities offered, and sophistication of the investor. Securities laws are complex and understanding your obligations will require a seasoned attorney. The repercussions of non-compliance are grave and could include rescission of your deal, an expensive and potentially devastating consequence for your company.