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The Legality Of Starting Up – Things You Can’t Afford To Miss



You can never be too prepared for the obstacles, surprises and set-backs of starting your own business. But it’s the legal issues that should not be overlooked. Lisa Gerard of shares some common legal mistakes entrepreneurs make, and ways to avoid them.


Put EVERYTHING in writing

Making any business deal with only a handshake could lead to some serious legal consequences. We should all know by now that our hands are not legally binding. In order to avoid any confusion or miscommunication with clients and vendors, have everything said in conversation in writing.



Remember the emails that came back to bite Mark Zuckerberg in the courtroom? Without those, the twins and Paul D. Ceglia may have never seen any Facebook compensation.


Choose the right business structure

Whether you choose¬† an LLC, S-Crop or sole proprietorship as your business structure, make sure it’s the structure that fits your startup; a hasty choice can lead to nasty tax bills at the end of the year. Check out a detailed overviews of these structures here.


Have Detailed Agreements For Partners

This is an issue I’m currently having with a project I’m doing with a few of my friends. We are getting the ball rolling on all the startup details except for one crucial element—the business agreement. What are our roles, how are we splitting the company, what percentage of equity are we willing to set aside? These are the hard details that should be discussed and written in a legally-binding contract in the beginning so further down the line there is no legal issues.




It’s tough with partners, especially if they’re your friend, but this will save any future disagreements.


Research your trademark

Before you invest your life savings on your brand, make sure you check out the U.S. Patent and Trademark Office database; and I’m not talking a quick skim. If you’ve overlooked a previous patent, you could be sued and lose all your investment. Try checking the patent registry at the state level, as well as local directories like to make sure domain names and business names aren’t already taken. It will take serious time and effort, but it will save you legal patent anguish in the future.


So, if you’re on the road to startup success, make sure NOT to overlook these essential legal details. After all, you don’t want to be the star of the next “Social Network,” now do you?


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Author : Holly Hutton

Born in the Big Easy and raised in the Sunshine State, Holly has spent the last five years brunching in the Big Apple and bantering with Big Ben. As a wandering writer, techy-in-training, and avid alliterator, Holly has written everything from educational policy and political news briefs to web content and travel blogs. She is thrilled to be a part of the KS team and working with a community of smart, savvy, entrepreneurs on all things startup!

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