Establishing a startup business is very exciting and fulfilling. However, there are other serious aspects that you need to consider, such as the legal aspect. It prevents you from running into legal issues that could hurt or even kill your startup. But, do you know these legal aspects?
Well, let us enlighten you on some key legal tips you ought to know as you venture into business.
1. Get required legal documents.
The right legal documents are necessary and non-negotiable in a startup as they are an indication that your business is legitimate. Yes, these documents protect you from hefty fines and possible lawsuits. They include business licenses and permits, company operating agreements, professional license, memorandum of association, and confidentiality agreements, just to mention but a few.
2. Define your Business Structure.
Your choice of a business structure can significantly affect the way you run your startup. The impact ranges from liabilities, taxes, continuity, and control over the startup. There are different types of business structures like a sole proprietorship, limited and unlimited companies, corporations, and partnerships. For your startup, it is recommended you chose a limited company structure. This type of structure not only ensures that your assets are protected but also warrant your protection as an individual in case of business disputes.
3. Draft Employees contracts and agreements.
Contracts and agreements reduce the chances of one party taking legal action against the other in the future. Additionally, these documents ensure protection and clarity to both employees and employers. Also, they form the basis of an agreement to terms and conditions of employment. The terms and conditions include and not limited to acceptable and unacceptable behaviors, handling confidential data, employees’ duties and responsibilities. However, the employee’s contracts and agreement only become binding after your employee appends signature. So, make sure that before any employee starts working, they should have signed the contract and the agreement.
4. Register Your Business Name and logo.
Did you know registering a business name and logo is also that important for your startup? The business name and logo form the public identifier of the startup. The trademarks, copyrights, domains, and intellectual properties are always embedded in the business name and logo. Registering the business name and logo prevents other companies from infringing on your startup. Additionally, with registration, you are assured that you have not infringed any other company’s identity, and therefore you are at no risk of legal action.
5. Get to know about startup insurance.
You also need to know about insurance coverage that can protect your startup. For example, you need to know about coverage that can protect your property and your employees in the startup. According to an attorney with experience in personal injury law, you need a cover to protect your employees from bodily harm. A good example of such a cover is workers’ comp insurance that takes care of lost wages and medical treatment.
6. Get to know about tax issues.
Before you run your startup, research the type of taxes you are obliged to pay and their timelines. This not only helps you prepare financially but also prevents you from incurring hefty fines, penalties, or legal action as a result of late payments or tax evasion charges.
7. Seek legal advice.
All said and done. You should get legal advice from an attorney as you set up your business. The advisor will help you in ensuring that you meet all the legal requirements before starting a business. Additionally, if any legal issue comes up as the business grows, they will offer assistance.
In a nutshell, ensure that your startup meets all the legal requirements to avoid penalties, fines, and legal actions, which ensures smooth operation and growth. Remember, in case you need any legal advice, do not hesitate to consult a skilled attorney to avoid problems that can hurt your startup.