Owing to the convenience afforded by the Internet and online marketing, starting a business is no longer a foreign concept. However, the Bureau of Labor Statistics highlights that 50% of the new businesses survive for only five years or a little more.
Hardly 33% of the ventures go on to have a life that stretches beyond ten years or more. A bitter cherry on top is what a study from the Harvard Business School found out. It learned that 75% of the startups eventually fail.
These findings make it essential for you to take all the preventative steps to ensure that your business succeeds. This includes taking all the necessary legal measures as well. You wouldn’t want your startup to sink only because you didn’t pay attention to the required legal actions.
In this regard, here some helpful legal tips for you:
#1. Make sure you avail legal consultation
Consulting a lawyer is a crucial step before any business takes off. The consultation session is the best time to ask any and every question that you may have regarding the legal implications of starting and running a venture.
The legal consultants would not only answer your questions but will also navigate you through the complicated legal labyrinth, explaining ways to protect your work lawfully. In a nutshell, you will get a legal blueprint that will show you how to proceed with your startup.
#2. Understand your business structure
A critical decision to make before you set your business entails deciding your business structure. You may end up struggling with some significant legal ramifications later on if you don’t pay attention in the early stages.
If you are serious about your startup, then it is wise to register it as a corporation or a limited company. Several businesses begin their journey as a sole proprietor. However, this is not advisable in the case of startups.
Registering yourself as a corporation or limited company offers you significant legal protection in instances of disputes with consumers. You also get increased protection over your personal assets.
#3. Pay attention to company ownership
Company ownership is not a matter that needs to be addressed emotionally. Instead, you need to sort the matter legally. When founding partners are lawfully bound to their startup, there are fewer odds of them running away in the middle of the work.
In several instances, founding partners run away, only to show up later on when the startup turns out to be profitable. Therefore, you need to chalk out a clear strategy for dealing with such behavior. Additionally, acknowledge all vital ownership-related questions such as what will happen if one of the founders bites the dust.
#4. Set a budget for legal issues
Although costs can be skyrocketing when you start your business, you need to set a separate budget for legal expenses. Legal investments turn out to be much more than what is initially anticipated.
Hence, it is best to give yourself a buffer in your budgeting for legal services. What’s more, it is wise to ask your consultant to provide an estimate of the total legal fees. You also need to factor in the payment for license filing fees, license fees, bonds, and more.
#5. Hire the right attorney
Ensure that you hire the right attorney who knows about business law and specializes in your field. For instance, you can’t hire divorce lawyers for drafting your business contracts. Hiring the wrong lawyer can cost you dearly.
You may also consider legal service providers such as Abdelhadi & Associates that specialize in certain areas. Their knowledge and experience can prevent your venture from getting entangled in legal matters.
#6. Protect your intellectual property
You also need to safeguard your business’s name. As it turns out, some venture names end up becoming highly valuable assets. Be mindful that you need to register your business’s name as a global trademark beyond reserving the corporate name.
A common mistake that entrepreneurs make is exposing their intellectual property by sharing confidential info with other people without having non-disclosure agreements in place. Therefore, don’t forget to add non-disclosure agreements to your legal to-do list.
With over three out of four startups failing, it is essential that you take the right measures to ensure that your business survives and thrives. Don’t forget to take all the needed legal measures to protect yourself from any complications later on.