You came up with the idea — and maybe even secured first-round funding. Now, before you go any further, it’s time for your startup to get legal. Here’s a list of 10 startup law considerations to think about early on.
#10 Startup Law Consideration: What Type of Corporation?
Step one: Disentangle your finances from the startup’s accounts by establishing a corporate structure. Does it make sense to file as a limited liability company or an S-corp? A startup lawyer will review your business plan, funding structure, and personal situation to determine the best route for your operation.
#9 Startup Law Consideration: Where To Incorporate?
It’s not always necessary to incorporate a business where you live. Depending on the focus and scope of your company, it may make financial sense to register in another state — and in some cases, even in another country. Consult with a startup lawyer who can review your situation and present several location options that could prove beneficial.
#8 Startup Law Consideration: Partnership / Startup Agreement
We cannot stress this point enough: Get a partnership agreement — and make sure all involved parties sign it! Your startup partners may be lifelong friends. It doesn’t matter. You still need a lawyer-drafted agreement that meticulously delineates everything from responsibilities to equity shares.
#7 Startup Law Consideration: Get Your HR House in Order
Do you already have employees? An office? If so, you need to be aware of various employment law compliance issues, OSHA safety standards, not to mention payroll requirements. If you’re flying by the seat of your pants, it could cost you a fortune in the end. It may seem daunting, but the sooner you set yourself up correctly, the better. Give us a call. We can help.
#6 Startup Law Consideration: Registering Intellectual Property
These days, intellectual property is a hot commodity. Be smart and protect your startup’s idea capital from the very beginning. Also, remember: It’s crucial to safeguard more than just your logo and tagline. Promotional pictures and content should also be shielded.
#5 Startup Law Consideration: Tax Positioning
A startup’s tax positioning can make a world of difference. The money you can save by leveraging all available deductions, credits, gifting, donation, and location options can mean the difference between making it and breaking it, especially during the early years. Our tax law attorneys understand how to craft compliant tax positions that will keep you as profitable as possible.
#4 Startup Law Consideration: Online Privacy Matters
Yes, you must comply with several online privacy laws. All businesses with a digital presence must adhere to federal, state, and local regulations, not to mention international standards, like the General Protection Data Regulation. Click here for more info regarding online privacy laws.
#3 Startup Law Consideration: Marketing Matters
If your startup is going to be the next big thing, then marketing will likely play a role. Now, marketing isn’t only advertisements and promotional pieces. Websites also fall under the umbrella and must adhere to specific regulatory standards. There are FTC, FCC, and various consumer safeguards with which to consider and comply. Click here for a start list of marketing DOs and DON’Ts.
#2 Startup Law Consideration: E-commerce Issues
Will you sell your product or service online? Will clients license it or buy a stand-alone version? What about interstate tax remittance? All of these questions, and others, should be reviewed by any startup that includes an e-commerce component.
#1 Startup Law Consideration: Contracts
Handshakes and informal emails are well and good. However, if you’re serious about your startup, invest in a batch of contracts and make people sign them. Get an employee and contractor non-disclosure; make sure you have affiliate and vendor agreements. Don’t use one of those free contracts that can be found floating around the ether; they’re often stuffed with unfavorable clauses that could expose you to a whack load of liability.
Connect With A Startup Lawyer
Gordon Law Group works with all manners of startups on everything from partnership agreements to marketing compliance, contract drafting to tax positioning. Our team gets the job done well and keeps startup budgets in mind.
Get in touch today to begin the conversation. The consultation is on us.Contact A Chicago Startup Lawyer »