At the startup stage, you’ve got a lot of work to do to establish your business. In the legal aspects of your business setup, you need to be truly diligent. Legal issues can be high risk and expensive, so be patient but realistic about all your legal coverage needs. It’s very important to understand all the possible legal issues your business may encounter.
Please bear in mind that everything you do in business has direct legal applications, from compliance to employee needs and workplace conditions. Every transaction, every purchase, every sale you make, every agreement and every contract has multiple legal ramifications. You must know your legal rights and obligations, and protect your business from possible legal challenges.
Insurance requirements your startup needs to meet
Insurance is one of the must-do first steps for protecting your startup. You should start your business with your insurance protection in place to protect against costly liabilities and possible financial hits to your bottom line.
Insurance is essential for all businesses. You will need to insure:
- Your business assets for damage, loss or theft
- Public liability
- Workers compensation
- Business premises
- Fire insurance
- Vehicles on the road
- Specific operating risks
- Specialised insurance may be required for some businesses, according to types of risk
This may look like a huge range of insurance needs, but you can get good all-purpose business insurance factoring in all these needs from most insurers. Just make sure that your coverage is up to date at all times to ensure that your insurance payouts are appropriate for your needs.
(There can be “gap cover” issues with insurance which provides a defined level of coverage, but still requires outlay to cover liabilities. Keeping your insurance current will ensure that your coverage is as good as possible, reflecting real liability costs.)
Business agreements & contracts concerns for your startup
Every business has multiple legal agreements in place. Startups often find themselves entering into a lot of agreements in their early days. These agreements may also include bread-and-butter baseline business agreements, for example.
It’s a good idea to standardize your agreements as much as possible and keep everything simple for both your business and your contractors. One of the ways to do this is a business agreement template.
Business agreement templates can be easily adapted to a whole range of uses, like independent contractor agreement templates. This is a “same page” approach, which is also very useful in that it simplifies management of agreements. A business contract template can include everything you need, and it’s easy to create.
Please note, very important: Make sure that your agreement or contract is checked by your legal advisor before entering into any legal obligations. Draft your basic agreement template and have it reviewed. This also saves extra work and possible legal issues if the draft agreement is deficient in any way.
Intellectual property is something your startup must protect
Many modern businesses own intellectual property (IP) in various forms. Your IP may be a logo, web content, designs, trademarks, or any intellectual property your business creates. To protect your intellectual property you will need to manage proper registration, copyright, and similar IP needs.
IP law is truly vast in scope, and it’s a particularly complex area of law. Your IP will need good legal protection. You will need to evaluate your IP as both an asset and as a saleable resource. Be patient with this sometimes time-consuming process, because it will be well worth your time and money.
Please be aware: Leaving your IP unprotected can be a very serious mistake. In fact, it’s one of the classic mistakes, and can be truly suicidal for startups. Infringement and theft of IP can be fatal to any business, including established businesses. Many businesses have literally been put out of business by losing their IP property rights. Do NOT leave your IP unprotected at any time.
Your IP can be a very valuable business asset if properly managed. Some IP generates good passive income in its own right, either under license agreements, royalty payments, broadcasting rights, electronic media rights, or other revenue earning scenarios.
The good news for startups about IP protection:
- The basic legal procedures for establishing your ownership of IP like trademarks, patents, designs, and copyright are quite straightforward.
- Your IP ownership gives you a very high level of protection in all legal scenarios. As the legal owner of your IP, you’re in a strong position when enforcing your intellectual property rights.
At this very early stage, it’s a good idea to engage the services of an accountant to set up your tax compliance. You may find yourself dealing with a range of tax requirements, but you’ll have everything in place. This process will ensure that your tax information and records are fully compliant, and provide you with essential information for tax management.
Tax requirements for startups typically include:
- Your books and accounts
- Receipts and invoices (hardcopy and electronic)
- Business systems and backups
- Revenue reporting
- Expense reporting
Having read and absorbed the points in this article, you’re in a position to protect your business against all the typical problems for startups. Good luck with your new business venture!
Author bio: Stewart Dunlop is a content marketer.