Starting a company can be daunting, especially considering all of the complexities surrounding taxes, intellectual property, partnership agreements, and more. At the beginning of a venture, founding members are usually solely focused on getting their product or service to the market. Although this focus is important, it is also wise to focus on long-term strategy and protect yourself from adverse legal actions or consequences. Here are three ways that hiring a business attorney in the early stages can help safeguard your startup’s future.
1. Establishing the Best Legal Entity
When you are establishing your corporation, a lawyer will guide you through the various legal entity options, including incorporation. Incorporating your enterprise separates your personal finances from your business, and shields you from having to personally assume liability for the company’s debts. An experienced business attorney will advise you on whether you should set up as a sole proprietorship, a limited liability corporation, or as a limited liability partnership. A lawyer will help you choose the entity that is best for the long-term, so that you won’t have to change it down the road and incur additional hassle and expense. Discussing your specific situation with a legal expert will allow you to evaluate your finances and future goals and help you make the right decision on how to incorporate.
2. Protecting Vital Intellectual Property
Putting safeguards in place to protect your intellectual property is imperative for the success of your company. Intellectual property is generally defined as unique items created by you that will provide economic benefit. Intellectual property includes trademarks, copyrights, and patents on your original works, designs, and inventions. A lawyer will assist you with setting up the proper intellectual property security so that you can avoid expensive litigation in the future. For example, you can guard your logo or brand by having your business attorney register them as trademarks with the U.S. Patent and Trademark Office. In addition, if a competitor copies your logo or brand, your legal advisor can send a cease-and-desist letter and immediately stop any further damage to your trademark. Taking shortcuts on intellectual property in the beginning of your business and not getting the proper protection could cause irreparable harm to your brand in the future.
3. Reviewing Complex Legal Documents
Starting a business usually involves dealing with large amounts of paperwork. Having a lawyer to work with you in the startup phase helps ensure all documents, both created and received by you, are correct, and makes sure that all of your interests are covered. Typical documents dealt with in the initial phases are contracts, insurance policies, and partnership agreements. A partnership agreement can be particularly important as you contemplate common issues among startup founders such as division of responsibilities, equity splits, and profit sharing. Although many generic business contracts exist on the Internet, an advocate focused on your circumstances will make sure the documents you use provide the unique protections needed for your specific situation.
You may have started with an incredible idea and a strong chance of success, but without adequate counsel, your startup could be on a direct course for burdensome expense and stress. Consulting with an experienced business attorney will help secure your company and save you from costly litigation in the future.