Legal Considerations For An Early-Stage Start-up

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Your start-up’s legals are not something to look over. If you get them in check at the very beginning of your entrepreneurial journey, it will save you a lot of work and potential downfall in the future. Another bonus…it is also a good indication to investors that your company is safe to invest in.

In this blog, we are going to take you on a brief overview of just a few of the legals that you should have in check as an entrepreneur and founder of an early-stage startup.

Firstly, it is essential that you have secure and agreed-on legal documents in place around your relationship with your co-founder(s) and any other relevant employees. For example, how much percentage of the company do you own? Are you still doing other jobs outside of the business? Can you return shares if one of the founders decided to quit? You will need to get these processes outlined and in a contract, sooner rather than later.

Next, you want to ensure your IP is properly protected. This means you fully and legally own your IP (Intellectual Property) and you have recorded this in the public register. The reason for this is that for example another individual claims your work to be theirs, your company already has legal protection and ownership of your product or service. It is also essential you have a confidentiality clause in all of your contracts to avoid information being leaked outside of the company.

The third point you should consider is making sure you have the correct legal structure for your business. Your business’s legal structure will determine your fundraising requirements, tax rates, and management and paperwork requirements, so it is crucial to choose this wisely. For more on business legal structures, click here.

The final point to consider is to ensure all of your legal contracts align with each other. The contracts should all work both around and in conjunction with each other to make sure you do not land yourself in trouble. You should always be constantly reviewing and updating your contracts up until their eventual termination, and potentially beyond.

For more on start-up legal content, click here to view Legal Edge’s video on Legal Budget and Strategy.


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