So you have decided to set up a new business? Fantastic! You have an exciting and engaging future ahead of you. Having developed your business plan for your startup, it’s time to attain the right legal services to ensure your success. Below, we have listed the ten legal challenges you can face when building your startup. Take these into consideration, and you’ll be progressing in no time at all.
1) Getting funds
Money makes the world go round. Without it, your business will not be able to get off the ground. Initially, this money can come from your personal finances or that of your family or friends. You will use this capital to purchase assets such as rental property, equipment and hiring employees.
If you have potential investors interested in your startup, it is important to have a clear business plan to avoid miscommunication.
Your business lawyer will assist you in preparing an investment agreement, as well as other documentation required by your investors.
2) Hiring a startup lawyer
A successful business lawyer with a great track record is indispensable when starting your own company. Not only will a good lawyer have experience, but they will also understand the risks involved with starting and be able to use their knowledge to mitigate risk.
Understand clearly the costs involved with hiring a business lawyer. It is a good idea to check around to find the right person for you.
If you need impartial legal advice for your startup, see Crest Legal.
3) Preparing legal documentation
A fundamental part of a successful business is proper legal documentation. Hiring a startup lawyer will help immensely with this. This legal documentation will also help lay out the direction of the company, and form a basis of how decisions should be made.
From how shares are to be divided, to handling new hires, legal documentation provides the framework for your company to operate effectively.
4) Set clear expectations from the start
A business is a complex web of ideas, documentation and organised efforts, but it doesn’t need to be confusing! To avoid misunderstanding, the founders should clearly communicate with one another, for example, their roles in the company, as well as stakes in the company.
5) Hiring employees
Employees form the backbone of a business and will need to be paid for their time. Contracts of employment will need to be signed, which details their role, as well as the dismissal process.
As the company grows in size, a human resources manager can be hired to help streamline this process.
6) Incorporating your company
A private limited company is the most common form of UK business incorporation and is the standard choice for a new startup. With at least one director, a limited company helps to separate any personal assets you have from that of the company, as the company then becomes an individual in its own right.
Your lawyer will assist you with the features of a private limited company, as the structure of the business you form will affect your personal taxation.
7) Personal asset protection
One of the aims you will have for your business is to properly protect your own assets. Your lawyer should also assist you with structuring your business in such a way that you can do this. Make sure to take extra care when signing contracts on a personal basis.
8) Protecting trade secrets and business
Aside from your personal assets, it is also important to protect the ideas and assets of your business. IP (Intellectual Property) may be a part of your business, for example, patents or trademarks, therefore it is crucial to put systems in place to protect this.
Make sure that the co-founders and employees sign non-competition agreements, to further protect your company.
9) Business to business contracts
These contracts are fundamental to the success of your business, and you will be handling these often. Business to business (B2B) contracts are important for legal transparency and protection, as well as mitigating potential liabilities. They provide physical proof of a deal and thus must be handled in an appropriate manner.
10) Ensuring your business is legal
Another reason to hire a business lawyer is to make sure that your business operates legally. The laws surrounding employment, handling of goods and more are detailed and far-reaching, therefore an experienced professional will be able to reduce the stress of handling this personally.
Arranging permits and legal approval, a professional business lawyer will ensure there are no issues legally and mitigate risk.
Starting a business is an exciting, albeit multifaceted endeavour, full of legal challenges but also potential. Armed with information about the ten challenges we have mentioned, we wish you the best of success with your new business!