Starting a business is a huge step in your personal and professional life. Most entrepreneurs make this step thinking about doing something they like and working hard to gather a solid base of customers for their products or services.
However, before you can reach that level, you have to deal with a wide array of tasks that have nothing to do with the end-product of the business and everything to do with laying an unshakeable foundation. And legal work is one of those tasks.
Now, even if browsing through laws and looking for the regulations that apply to your business is not your favorite way of spending time as an entrepreneur, this is a crucial step for the safety of your business. Therefore, today we are going to discuss the top three legal steps that are most common and necessary for startups.
#1: Define your Business Structure
Businesses exist in a variety of shapes and sizes, which is why it’s important to know which one best suits your needs and future plans. In addition, the structure you choose now will impact any future actions such as liability, funding opportunities, and even tax responsibilities.
The good news is that you can change the structure as the business grows. However, it’s best to make the right choice from the start, to avoid any complications in the future.
The even better news is that you can hire the services of a freelance lawyer to help with the decision and provide guidance along the way. In fact, there are quite a few types of legal work you can outsource in order to lower legal costs and have access to the right expertise in the legal field.
#2: Set Up Your Contracts
Whether it’s employment or a business partnership, your startup must have a contract template ready for use. Pay close attention to the Terms and Conditions section, to make sure all the rights and obligations of the parties are well highlighted and easy to understand.
Again, this is a step where you can use advice and guidance from a professional lawyer. But, to keep the costs down, you can always draft the contracts yourself (including the terms and conditions you find important) and ask a lawyer to check them for mistakes and legal loopholes.
#3: Intellectual Property (IP)
Trademarks, copyrighted elements, and even patents have tremendous importance in a business’s development. First, it’s important to know how to protect your IP elements, but it’s also good to know how to benefit from them by attracting more customers and investors.
Therefore, every startup needs to know about the IP elements they can protect and why these are important. For instance, you can protect the logo of your brand and the overall product design by using a trademark. On the other hand, if you have an invention or a novelty you want to protect, you may want to consider applying for a patent.
In summary, legal work is important for a business as it provides the right setting for success. It also allows you to identify the elements that may hinder the growth of your startup and take preventive measures while there’s still time to act.