Important Legal Considerations for Start-up Founders
Starting a business can be an exciting yet challenging time, even for the most experienced of founders. With so much to plan and execute to get off to a strong start, you could be forgiven for overlooking certain legal aspects. However, it pays to get all your legal affairs in line before you launch, to avoid potential pitfalls later – when it may be too late to protect yourself from trouble.
Failure to get the right legal counsel in your early days could have disastrous consequences – even potentially, the loss of the business. Don’t leave your business exposed, protect yourself as a director too, by working with us to identify potential risk areas. Getting the advice you need at this point could be the difference between success and failure.
Before your launch, these aspects need careful consideration…
The agreement between co-founders
Even if you are starting a business with family or friends this needs some serious thought, and it needs to be done properly to avoid fallout later. This can also help to give the business a clear direction – a key element of a successful start-up. Just consider Facebook’s situation which lead to the legal war between Zuckerberg and the Winklevoss’. It is absolutely essential to agree, through legal documentation, what the deal is between co-founders.
Another decision that needs to be taken immediately is the company formation. Will it be more beneficial to set up as a sole trader, limited company or a partnership? This decision can have huge implications on your financials, not least in terms of the tax you will pay.
Directly linked to the long-term value of your new business, it is critical to protect your own IP, whilst also ensuring that your products don’t infringe the protection other businesses have in place. Having an experienced legal partner to assist you with this is an important investment your start-up needs to make.
Contracts / agreements
The next major consideration is your contracts. Contracts with customers, suppliers and staff all need to be drafted with the help of a legal professional to ensure that you are protected. Disputes in business are extremely common so this is an area of your operation that you need to keep in order, and ensure that contracts are drawn out sufficiently before trading begins.
Employee handbooks, insurance, payroll and pensions are just some of the considerations you need to review prior to hiring new starters. If you are in the privileged position as a founder to hire people from day one, speak to us as soon as possible so that we can ensure you have all bases covered.
With the new General Data Protection Regulations (GDPR) coming into force in May 2018, getting your processes in order in terms of how you handle customer data is even more important. Fines for non-compliance can be up to 20-million-euro or 4% of group annual turnover, whichever is larger, potentially destroying an otherwise strong business.
These are just some examples of the legal aspects that start-up founders need to address. Given that the legal side is only one of many elements that founders need to consider, the whole process can soon become overwhelming. Not only can an expert legal partner take a lot of these tasks off your hands, it will also ensure that important documents and processes are developed correctly, protecting your future and that of your new business.
For assistance in any of the areas discussed here, or if you have any ongoing legal concerns in business, please contact our dedicated Commercial team on 01282 433 241 today.