5 Legal Landmines That Could Sink Your Startup

5 Legal Landmines That Could Sink Your Startup

When starting out, many small businesses operate on a shoestring in order to keep operating costs low until they are on their feet. Hiring the people essential to the survival of your business is critical and should include legal expertise that can help you avoid these five legal landmines:

1. Founder conflicts.

Starting a business generally involves a lot of improvisation at the beginning, and if more than one founder is involved, roles and expectations may not be well defined. An attorney can help founders draft operating agreements to that everyone’s roles are clearly laid out and ownership is apportioned appropriately.

2. Employment issues.

To protect the interests of your business, you will need employment and confidentiality agreements for your employees. You also need to ensure your business is in compliance with state and federal employment laws. Covering these bases at the outset is crucial to the long-term success of your company. The people you hire for your startup today may not necessarily be with you for the long-term, so be sure you protect your company with employment agreements that cover confidentiality and non-compete issues.

3. Intellectual property.

The value in many startups is in their intellectual property, and that needs to be legally protected and defended. Not only do you need to pay attention to not infringing on others’ copyrighted or trademarked material, you need to protect your own IP with the proper trademarks and copyrights so you can build on their value and defend against any possible infringement.

4. Contracts and agreements.

Strong business contracts are essential to protect yourself and your business. Contracts take the form of many different types of agreements found within the workplace. These can include employment agreements, non-compete agreements, nondisclosure agreements, operating agreements, service contracts and more. Many startups can suffer from cash flow problems, so be sure that you get any agreements with customers in writing and include penalties for failure to pay.

5. What you don’t know.

Having that experienced counsel can be invaluable to a business owner who may not have the experience or legal knowledge to foresee potential problems and prevent them from occurring. This is especially true when it comes to drafting contracts with vendors, employees and customers.

Jurado & Farshchian, P.L. assists entrepreneurs and business owners with trademark and intellectual property matters. Please call one of our experienced attorneys at (305) 921-0440, or email us at info@jflawfirm.com.

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