Starting a new business is an exciting time. A difficulty which often arises is getting all necessary legal advice, documents and structures in place prior to starting. Even though cash flow can be tight when starting off a new venture, this is an important time to receive professional advice, as it may limit the risk of unintended issues arising after you are up and running.
What are the legal issues/advice/documents you will need before you start your business? Sadly, there is no such thing as “one size fits all”, as the answer to this question turns on the nature of your business, how you are structured, your size, and the industry you operate in.
Examples of the types of legal services we regularly find a start up business needs (and why) include:
• Legal structure advice: Before starting to trade, have you considered whether you will trade as a sole trader, company, partnership, trust, or even a company as trustee of a trust? This is important to discuss with both your lawyer and accountant to minimise unintended legal, accounting and taxation consequences.
• Founder Agreements (eg Shareholder Agreements): If you are going into business with other people, a founder’s agreement (such as a shareholders agreement, partnership agreement, unit holders agreement) is a must. This agreement should cover off issues such as what is the entry and exit process (and conditions which must be satisfied prior to entry and exit), how are decisions made (including decisions which must be unanimous), who owns any IP which is generated, and any restraints against an exiting party from competing with you.
• Intellectual Property Protection: The type of IP in a new business will vary from case to case, but almost every new business will have a new name/brand. That name/brand should be protected by way of one or more registered trade marks. This will provide you with an ability to prevent 3rd parties from using a brand similar to yours, plus limits the risk of being forced to re-brand as a result of infringing the rights of a 3rd party.
• Good and/or Services Agreements: If your business intends selling goods or providing services, there is merit in having your good or services agreement ready for use before you start to trade (or soon thereafter).
• Employment and/Contractor Agreements: If engaging people to work for you, will you engage employees or contractors? Do you understand the difference between the two and the consequences of getting this wrong?
ARETE Group’s Start Me Up package: A fixed fee package tailored to suit start up businesses
ARETE Group offers a tailored service package for start up businesses. We call it Start Me Up!