Starting a company can be daunting, especially considering all the complexities surrounding taxes, intellectual property, partnership agreements, and more. At the start of a venture, founding members are usually focused solely on bringing their product or service to market. While this focus is important, it is also wise to focus on long-term strategies and protect yourself from adverse legal actions or consequences. Here are three ways hiring a business attorney in the early stages can help safeguard the future of your startup.
1. Establish the Best Legal Entity
When you set up your company, an attorney will guide you through various legal entity options, including incorporation. Incorporating your company separates your personal finances from your business, and protects you from personal liability for company debt. An experienced business attorney will tell you whether you should set up as a sole proprietorship, a limited liability company, or as a limited liability partnership. An attorney will help you choose the best entity for the long term, so you don’t have to change it later and incur additional hassle and costs. Discussing your particular situation with a legal expert will allow you to evaluate your finances and future goals and help you make the right decision about how to combine them.
2. Protecting Vital Intellectual Property
Putting in place safeguards to protect your intellectual property is critical to the success of your company. Intellectual property is generally defined as a unique item created by you that will provide an economic benefit. Intellectual property includes trademarks, copyrights and patents for your original works, designs and inventions. An attorney will help you set up proper intellectual property security so you can avoid costly litigation in the future. For example, you can protect your logo or brand by having your business attorney register it as a trademark with the US Patent and Trademark Office. In addition, if a competitor copies your logo or brand, your legal counsel may send a termination letter and immediately stop further damage to your trademark. Taking shortcuts on intellectual property early in your business and not getting proper protection can cause irreparable damage to your brand in the future.
3. Reviewing Complex Legal Documents
Starting a business usually involves dealing with a large amount of paperwork. Having a lawyer to work with you in the startup phase helps ensure all paperwork, both created and received by you, is correct, and ensures that all of your interests are covered. Typical documents handled in the initial phase are contracts, insurance policies and partnership agreements. Partnership agreements can be very important when you are contemplating common issues among startup founders such as sharing of responsibilities, sharing of equity, and sharing of profits. While many generic business contracts exist on the Internet, an advocate focused on your circumstances will ensure that the documents you use provide the unique protection needed for your particular situation.
You may have started with a great idea and a strong chance of success, but without adequate advice, your startup could be on a direct path to burdensome costs and stress. Consulting an experienced business attorney will help secure your company and save you from costly litigation in the future.