- Not making the deal clear with co-founders and initial investors
Always ensure that matters are made clear. A simple shareholder’s agreement could be enough.
- Coming up with a name
It’s important to do some research to help you avoid trademark infringement and domain name problems.
- Not starting a business in the correct legal form
One of the very first decisions that founders must make is in what legal form to operate the business. The choice between a company, partnership, sole trader etc. A mistake at this stage can result in higher taxes being paid or the founders becoming subject to significant liabilities that could have been avoided with a little forethought.
- Not taking into account important tax issues
When starting a business, there are some key tax issues to consider.
- Not producing a sound standard form contract in favour of your company
Almost every company should have a template contract when dealing with customers. But, there really isn’t a “standard form contract,” as every contract should be bespoke to the goods and/or services that you provide and the manner in which you provide them.
- Not ensuring your supplier contracts are workable
Ensuring that you have sufficient rights and, in certain cases, those rights flow down to your customers can have important consequences.
- Not protecting intellectual property rights
If you have developed a unique product, technology, or service, you need to consider the appropriate steps to protect the intellectual property you have developed.
- Lack of employment documentation
Business start-ups often encounter problems when they do not maintain adequate employment documentation, such as contracts of employment and policies.
- Not having compliant online trading terms
Trading online is complex and there is a minefield of legislation to comply with. Ensure that you are compliant from the start.
In a misguided effort to save on expenses, start-up businesses often hire inexperienced legal counsel or go it alone using information gleaned from the internet.
However, a mistake at this stage of your business’ life could be devastating, and the skills required to provide quality advice at this stage will rarely be found in one individual lawyer.