The entrepreneurial journey is often daunting as one has to give everything to establish a venture and run it successfully. It is easy to overlook small yet crucial things between the endless to-do lists, client meetings, and financial challenges. Startup owners often forget to check the legal side of operations as they hire people, sign vendor contracts, and set terms and policies for their company. But the smallest legal mistakes can be painful as they land you on the wrong side of the law. The last thing you want to deal with at this stage is lawsuits. Thankfully, you need not do a lot to stay on the right side of the law. Here are a few tips to stay legally safe as a startup owner.
Get professional legal help
Startup owners have several legal aspects to deal with, and it is easy to slip without having professional expertise at hand. You may feel tempted to DIY without a lawyer or hire inexperienced legal counsel only to save on expenses. But this mindset can land you in trouble down the line. It makes sense to hire someone who has expertise in legal areas that matter to startups and corporations. These include corporation and commercial securities law, contract law, intellectual property law, employment law, tax law, and franchise laws. Collaborating with experts who can cover you in these legal areas can make the sail smooth for your new venture.
Choose the right business structure
Choosing the right business structure is vital for startup owners because the decision has significant legal ramifications. Ideally, you must opt for setting up as a corporation or a Limited Company if you plan to stick around for the long haul. Although starting out as a sole proprietorship sounds easy, it is not a good idea because you may face problems down the line. Registering as a corporation or a Limited Company protects your personal assets and offers better legal options if there are disputes with consumers.
Double-check your contracts and agreements
Startup owners have to sign several contracts with founders, vendors, partners, and employees. You may want to skimp on legal services and opt for documents found online. It seems like a good idea as you save money by skipping legal services and picking contract terms and conditions from ready templates. But you may miss out on a critical clause or adopt inapplicable language by picking these contracts. Ensure that a legal expert double-checks your contracts and agreements to clarify terms and prevent hassles later.
Do not overlook criminal defense
As a business owner, you will probably have corporate and commercial legal aspects on top of your mind. Surprisingly, you may face criminal charges while running your business. Fraud, tax evasion, cybercrime, bribery, embezzlement of funds, and money laundering are the common criminal charges business owners encounter. Ensure you have a criminal defense specialist on board to rescue you in such situations. You can rely on these criminal defense attorneys to save your business and reputation. Criminal charges against your startup make a serious concern as you may lose revenues, customers, and reputation, so do not take them frivolously.
Be cautious about your intellectual property
Another crucial aspect of keeping your startup legally safe is ensuring it is on the right side of intellectual property rights. Problems may arise as early as choosing the company name. Ensure to avoid domain name problems and trademark infringement. You can face legal issues even by infringing on someone’s trademark unintentionally. Consider having an intellectual property lawyer to help you with trademark research and keep your startup clear of infringement concerns down the line. They can also cover the areas like patents, copyrights, confidentiality agreements, and trade secrets.
Maintain proper HR documentation
Since startups run with small teams, they often get sloppy in maintaining proper HR-related documentation. It can lead to legal hassles eventually, as you may face HR compliance issues and employee litigation. File records of employment agreements, offer letters, IRS W-4 forms, benefit plans, and workers’ compensation documents. Establishing and documenting company policies and anti-harassment and discrimination policies is equally crucial. You must also keep records of termination notices and disciplinary proceedings taken against employees to steer clear of disputes and lawsuits.
Staying on the right side of the law as a startup owner sounds like a lot of work. But the effort is worthwhile as it keeps you stress-free about legal hassles and enables you to focus on growing your business. The best approach is to let experts handle these concerns because they know the best.
