Legal concerns you may grapple with during a company’s infancy
Few things are more exciting for an entrepreneur than when they get a fantastic idea, a solid plan and the drive to make their mark. However, it’s crucial to acknowledge that the journey toward success doesn’t end once a business has been launched.
When a startup is in its infancy, there are a myriad of legal concerns that can be daunting for new entrepreneurs. Addressing these concerns can be crucial to establishing a strong foundation for a business, preventing future legal troubles and helping to ensure smooth operations.
Choosing the right business structure
This is a crucial decision for a startup because it sets the tone for the enterprise’s legal and financial journey. The simplest business structure is a sole proprietorship because you don’t have to separate your personal from business finances. Unfortunately, this structure does not offer protection against personal liability. You will be personally responsible for your business’s debts because your business and personal finances will be intertwined.
Suppose you want to run your enterprise with a like-minded entrepreneur; you can consider exploring a partnership as the structure of the business. In this case, you and your partner will share the enterprise’s ownership, management and liabilities.
If you’re keen on personal liability protection, you can make your startup a corporation or a Limited Liability Company (LLC). However, you should know that these structures are probably ideal for larger businesses. By consulting with a reliable legal team, you can help ensure you choose the structure that best aligns with your goals and risk tolerance.
Protecting your intellectual property (IP)
A lot of time and thought have likely gone into establishing a unique and relatable brand for your startup. Your brand name and the product designs you settled for should connect with your target customer to help you secure a reasonable market share. Protecting them through intellectual property (IP) laws is crucial in helping to ensure another startup doesn’t come along and piggyback on your creativity. You’re going to need:
- Trademarks to protect your business’ slogan
- Copyrights to secure your artistic creations
- Patents to help ensure you have exclusive rights to your inventions
By seeking legal support, you can better understand which type of IP protection applies to your business and the registration process you should follow.
Anticipating and addressing the most common legal concerns during your enterprise’s infancy can help you lay a good foundation for your startup. By choosing the right business structure and protecting your intellectual property, you can potentially avoid costly legal issues down the road.