Starting a business already means taking a risk, financially. As thrilling as it is, remember that anything could go wrong. When everything seems to be all sunshine and rainbows, new business owners tend to overlook legal fundamentals, which is especially important in those misleading times.
Although the process of hiring and working with a lawyer may sound confusing and unnecessary at first, once your start-up takes off, it is crucial. Gone are the days where you could write up your own legal documents, based on the downloadable copies provided online, and expect to be fine.
Today, if you don’t seek professional assistance on something you feel is simple and self-attainable, you could be one lawsuit away from being out of business. With the right guidance, you can feel confident that you’ve got all the expertise you need to get down to business, and to do it right.
Here are the main reasons why start-up businesses require a lawyer:
Business name and license
Starting a business is a lot more complex than choosing a name or idea that you like and going with it.
You have to do research to ensure that the name you’ve chosen is legally available, and if so, it also means that a legal advisor would need to help you protect that name from being used by others. Once these formalities are out of the way, then you are off to a good, secure start.
Preparing for start-up
Getting professional advice when setting up your business is always a great way to reassure yourself that you’re on the right path to a successful business venture. Not only are they offering the much-needed legal advice, but they can act as a soundboard for any future goals and objectives.
This also goes hand-in-hand with your partners. As much as you’re off to a great start, it is important that you solidify all relationships professionally, with the properly written terms to protect your business from tax liability and to protect your private business information from being distributed illegally.
Protecting your intellectual property
When starting out, it’s very easy to assume that your business might not be as successful as you’d hope for it to be. Whether or not you feel this way, make sure that you protect your intellectual property (IP) no matter what. At the core of many new startups is an innovative idea or invention that any thriving company would be happy to snatch up. Needless to say, protecting the ‘heart’ of your business is essential.
It is also advised to enter into confidentiality agreements with any individual or organisation that is involved with your start-up. This way you don’t jeopardise your business by giving those closest to you open access to your professional ideas and business plans.
Legal and contract documentation
As previously mentioned, downloading legal documents might seem like the easiest and most affordable option, but when it gets you into a pickle later on in your business life, you would have hoped that you had consulted with a professional regarding anything employee, supplier or partnership related.
Contracts and contract-related issues can be anything from drafting the contract to reviewing agreements before they are signed.
Protecting your brand identity
Protecting your brand identity is just as important as protecting your intellectual property. With the big dogs roaming around your brand, it’s very easy for someone to recreate your brand in another light. Take this as a precaution to protect all the time and energy you’ve put into building a brand that means something to you.
As your company grows, make sure that your name and brand are protected with any of the following identity reservations:
- Trademark: this is when you protect your brand with a recognisable sign, design or expression which identifies products or services with your particular brand.
- Patent: a patent gives you the right to use a name or idea that others will not be able to use.
- Copyright: when you reserve your business as copyrighted, it gives you and your business the right to sue infringers if they copy your ideas or business name.
In the beginning of a business venture, you never truly know how much capital you will need to take your business to new heights.
For many start-ups that require that extra bit of cushion, it’s important to raise your capital properly, with the help of legal advisors (you can find a trusted partner on this website: http://www.africanunity.co.za).
Two options can be debt fund or equity funding. Debt raising is usually in the form of a loan from a bank, friends or family, and equity funding is referred to as selling ownership in your company in return for additional capital that will be used to help grow the company.