Legal Advice For
Startups And Entrepreneurs

A solid foundation is key to your success as an entrepreneur or stakeholder in a startup company. So, it is critical to have a knowledgeable experienced startup attorney as part of your team.

There are a number of decisions you must make at the outset to get your organization off on the right foot, and a multitude of documents necessary to give these decisions legal effect.

Choice of entity, filing required documents, raising capital, tax considerations, compliance issues, and other external matters require attention to detail and careful business planning.

Internally, you need to ensure that you properly structure the formal relationships among executives, directors, stakeholders, key employees, and other stakeholders.

At Walsh Banks Law, our lawyers take the approach that every startup has enormous potential. New emerging companies face unique issues that must be addressed at the same time stakeholders are relentlessly working to scale the company. A startup lawyer can help with the necessary legal tasks, ensuring you can focus on building your new company.

Once you know the key differences between a startup company and a small businesses, you can see that you face a good number of challenges that other types of business do not have to face. A knowledgeable startup attorney can help you navigate common startup legal issues.

Contractual Matters:

Considering the fact that investors in a startup have certain expectations, you should be clear in setting the parameters of the startup arrangement. You may be limited in terms of bargaining power, but you should firmly establish various factors when crafting the details. A startup lawyer can protect your interest when it comes to:

• Ownership interests
• Delegation of responsibility
• Vesting of stakes in the startup
• Voting power
• Removing key stakeholders
• Many other details.

In addition, you should note that the dynamic may change as the startup progresses. It is important to have solid contractual terms in place for future hires and partnerships, so that the startup company’s infrastructure remains intact.

Prompt, Effective Entity Formation:

Careful assessment of the most suitable business structure is crucial, particularly when liability, taxes, and efficient exit strategies enter the picture. It is better to choose the right fit from the start than to transition from a partnership to some version of a corporation, limited liability company, or other arrangement.

Regulatory Compliance:

Federal securities and state blue sky laws are so complex that many startup companies do not even realize how and when they violate them. Failure to comply with the vast regulatory scheme can lead to devastating fines, legal penalties, and even criminal sanctions. A startup lawyer knows the rules regarding disclosures, filings, and forms.

Company Operations:

The importance of proper documentation and adherence to startup policies increases as the organization gains momentum. With expansion comes serious issues relating to employees, investors, and corporate responsibility. You cannot afford risking litigation if you overlook:

• Stock rights and options
• Filing and compliance related to bylaws and articles of organization
• Restrictive covenants and confidentiality agreements
• Employment contracts
• Benefits issues
• Other details that relate to operating any company, including a startup.

Intellectual Property:

Many startups involving technology recognize the importance to protect their intellectual property. However, all startup companies must be cognizant of the relevant issues, the value of trade secrets, and implications of proprietary information. A wide range of complex legal doctrines affect your intellectual property and, as a startup, your work IS often the value. Protecting intellectual property and ideas should be a core focus of operations. It is a huge mistake to glaze over intellectual property terms when working with stakeholders, partners, investors, and others.

Taxes:

Complying with tax laws is a trying task, but it is not enough to simply adhere to the Internal Revenue Code. Startups must also endeavor to seek out tax advantages that will offer benefits and reduce liability down the road. Some of the more common tax issues affecting startups include:

• Determining the most beneficial corporate formation for filing
• Properly filing sales and payroll taxes
• Complying with IRS guidelines securities, stocks, and stock options
• Elections, including when to pay taxes on income
• Taking advantage of incentives that apply under tax laws
• Many other tax matters.

A lawyer gives you peace of mind knowing that essential tasks are being handled efficiently, properly, and legally. Your own financial resources – and the contribution of your investors – are in good hands if you have skilled legal counsel from the outset. The investment may seem considerable at the beginning, but it is worthwhile when you know you are saving your enterprise time, money, resources, and legal troubles in the long run.

A startup lawyer benefits your organization goals and adds value to your enterprise in many ways, including:

• Taking the lead in negotiations with investors
• Drafting proper organizational documents
• Advising you on tax matters
• Minimizing risk of liability in connection with employees, contractors, and other partners
• Negotiating, reviewing contracts and preparing business agreements;
• Protecting intellectual property, including trademark, copyright, patent, trade secrets, and other rights
• Other tasks.

Most importantly, retaining an experienced startup lawyer ensures you can devote the time and resources necessary to promote your objectives. An attorney will make sure you focus on the most important matters, so you will not be distracted by the details.