Legal considerations are important for every start-up as if they are not taken seriously, you company could soon be in the clutches of legal battles. Ignoring legal procedures is a fundamental mistake made by entrepreneurs who do not research enough and make the mistake of going with the flow. A start-up has to be a carefully planned journey where you know what steps to take on the business front as well as legally.
Here are three legal considerations to look into before starting your business:
This is a crucial mistake most people make as they trust their friends who have now turned into co-founders. However, maintaining friendly ties and maintaining a business are two very different things and during the course of building a business, you might tend to disagree in a lot of areas. Hence, it is important to have written documents which are maintained in secrecy amongst the founders. An important clause which should feature in this document is what happens when one of decides to leave the company.
In your start-up days, you will need to reveal the business plan to some people for monetary support. However, to protect your idea from being stolen or duplicated, you need to get people to sign Non-disclosure agreements before making them aware of your idea. This document binds them by an oath of secrecy regarding the business plan, revenue model and almost everything regarding your business. It is also advisable that you make your employees sign NDAs regarding company secrets.
If this legal aspect isn’t taken care of, it is very easy for companies to steal your ideas, logos and business models. All big companies like Facebook and Kingfisher look to fiercely protect their intellectual property in order to protect their trademarks (brand name, logo etc). In order to not lose your IP due to miscalculated or careless decisions, it is advisable to protect it from the very beginning.