Starting a business is a very exciting and a major milestone for Entrepreneurs, however one may face significant business and legal challenges during the initial stages. Although mistakes are inevitable, legal mistakes may have a boomerang effect on your business.
Here is the list of some common legal mistakes made by small and budding companies. These mistakes should be avoided in the early stages of forming the business and while dealing with your employees:
1: Not properly drafted Co-Founders and Share-Holder Agreements.
2: Not structuring your business and analyzing tax implications.
3: Choosing a Company name that has Trademark Issues, Domain Name problems, or other issues.
4: Not having the right Legal Counsel.
5: Not coming up with a good Contracts for business deals, customers etc.
7: Not complying with the Data Protection and Information Technology Laws.
8: Not carefully considering Intellectual Property issues.
9: Not complying with Securities Laws when issuing Stock.
10: Not determining which Permits, Licenses, or Registrations you will need for your Business.
11: Not maintaining proper Corporate and HR documentation.
12: Not using a proper Employment Agreement or Offer Letter when hiring Employees.
13: Not requiring all Employees to sign a Confidentiality and Invention Assignment Agreement.
Start-Ups that manage to avoid these legal pitfalls and missteps have a better shot at success than those companies that fail to anticipate and plan for them from the beginning. It is very important to invest in planning and obtaining expert advice to avoid major troubles later.