We know this about start-ups; they are often working with a lean budget that has to go a long way. A strong foundation and quick growth are essential to the survival of the business.
Given those facts, it may be tempting to skimp on legal support. We get it, but we also know it’s a mistake that many start-ups come to regret.
An ounce of prevention is worth a pound of cure – never has a truer statement been spoken. The costs associated with litigation and court will far surpass any legal fees to ensure you are compliant with all regulatory guidelines and are adequately protected from the start.
You should look for protection in terms of compliance with governmental regulations, dealings with third party businesses and vendors, as well as the public. Lastly you want to ensure there is protection for yourself and your partners – including protection from each other in the event of a dispute.
At a minimum, you will require sound legal advice on:
- Structuring your business and incorporating your start-up
- Contracts and agreements (vendors, employees, contractors, shareholders and more)
- Funding
- Intellectual property
Structuring your business and incorporating your start-up
The structure of your business and entity you choose to form, will determine your legal responsibilities and liability. Different business structures offer different benefits and risks. In some cases, you may be personally liable – which means your personal assets are at risk. A business start-up lawyer will help minimize your risk and find the best structure for your needs.
There are tax implications to consider as well. Businesses will typically look for the structure that is best for income and taxation.
There may be licensing, registration and permit requirements. Proper filings are crucial to prevent penalties. It is also important to understand the laws related to international business and cross-province business if relevant.
Contracts and Agreements
Most businesses require contracts for funding, equipment, suppliers, vendors, employees, partners and more. Without the proper protection, your risk ending up in court fighting it out.
Clearly defining the rights and obligations of each party and also outlining guidelines for terminating the agreement will save you money, time and stress. It’s a good idea to include a clause on dispute resolution. Having an agreed upon plan to follow should a dispute arise will makes a stressful situation easier to navigate.
Funding
New businesses require capital, and with that comes contracts, records of income and distributions as well as other responsibilities as outlined with your investor. Having a business lawyer advocate for and protect you and ensure compliance is the best way to avoid serious problems.
Intellectual Property
A lawyer can help you obtain trademarks, copyright and patents. Licensing your work product is also something that needs to be covered in any contracts with your customer base. Ensuring your intellectual property is protected is vital to the security and the future of your business.
Preparing for Your Start-up Lawyer
Do your research. Find a lawyer with experience in the areas relevant to a start-up – typically an attorney with 5+ years will be well versed.
Organization and clarity will help your lawyer best serve you efficiently. Gather documents, make notes on any decisions you’ve already made and questions you have.
While it’s important to feel like your lawyer is a good fit, it’s even more important that they know the subject matter and come across and confident.
Determine what budget you have to spend, keeping in mind that you want to balance experience, reviews and cost. Simply going for the cheapest option will not serve your best interests.
Lawyers will typically bill as a flat rate, inclusive of everything you need, or based on hourly fees.
You are about to invest countless hours and sweat equity as well as a significant amount of cash, to build a business that is successful and that will sustain you and your family for years to come. Investing in quality legal help to create a solid foundation is some of the best money you will spend.
CEO Law offers business lawyers with experience assisting start-ups. Our platform allows you to easily work with a lawyer of your choice for better rates than you would get by going directly to Bay St. lawyers. Your experience with CEO Law is our biggest priority – exceeding expectations is our goal.
