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4 Common Legal Issues Start-ups Can Run Into


Starting a new business can be one of the most exciting times of your career. There are so many benefits to starting a new business, from being your own boss to working on something you are passionate about every day.

However, start-ups can face lots of challenges, especially within the first year. When a new company is launched, you can find yourself running into legal issues if you aren’t aware of some of the key issues.

Take a read below of some of the main legal issues that arise when starting up your own company. You will need to be aware of how to avoid these, or how best to deal with them if you do run into them.

1. Patent issues.

If you are a start-up company, it’s possible you will have a product or service which needs protecting. The protection for your products is called patenting. Problems can arise here if a product you have created already exists out there, or your products or services fall in line with being very similar to another company.

It can work vice versa, too. A competitor company may steal your idea or produce a similar product to what you have. This would create a problem for you regarding obtaining a patent. Problems can also occur if a rival company steals your idea or produces a product similar to yours and you do not have a patent.

The same goes for thinking about name rights. Your business name needs to suitably represent your company, without using the rights of an existing companies brand name. By opting for the same or similar name as an existing company, this could lead to you facing legal issues.

2. Company terms and conditions.

If your company hasn’t put the correct terms and conditions in place, then legal issues could also occur. Without having any terms, conditions or a legally binding contract in place, then all kinds of problems can arise. Customers may fail to make payments or disputes between suppliers could form. Terms and conditions can be used to protect you as well as the company, so this is vital.

3. Employee rights.

If you have plans to grow your start-up company, then an area you will have to be knowledgeable about is employing staff. There are various employee rights that must be adhered to from the recruitment stage to everyday working rights, and if these aren’t followed correctly, this can lead to legal issues.

Staffing and employment go beyond employee rights, holidays and wages. There are now issues such as discrimination and unfair dismissal that need to be considered. This is where start-up businesses may sometimes require a legal professional to help resolve any legal problems. A skilled solicitor is the best legal professional to work alongside any staffing issues. Usually, a compromise agreement can be carried out, which should ideally speed up any legal issues associated with employees.

4. Protection of personal assets.

All types of start-up business owners should be aware of the importance of keeping their business assets separate to their personal. The common way to do this is to keep a different bank account – which will be a business bank account – and use this for expenses and business-related items. In the unfortunate scenario that your business was to be sued, your company’s assets may be seized if they were acquired from your own funds.

By being aware of the legal issues that businesses can run into means you can start looking at how to reduce the risks, to avoid any future situations. Then, you can start protecting your business right from the beginning, avoiding problematic legal mistakes.


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