How to Avoid Legal Snafus That Could Sink Your StartupWhile being passionate about your new business may make up for some of what entrepreneurs may be lacking in business experience, passion is no guarantee that your new venture will find success. You need to exercise caution to be sure you don’t make any legal missteps that could sink your startup, including:

Lease agreements. Leasing office space is much different than renting an apartment, and there are pitfalls in commercial leases that can have an impact on your business.   Typically, commercial leases are created by landlords and may contain clauses that can impact your growth, so be sure you negotiate all the terms of your commercial lease before making a commitment.

Entity selection. You need to understand the long-term ramifications of each entity structure before choosing one for the operation of your enterprise. If you choose the wrong structure, it could be costly to undo at a later date, so make your choice with the guidance of an experienced business attorney.

Partnership agreement. If you are starting your company with a partner, be sure there is a partnership agreement in place that details the allocation of profits and losses as well as other key issues that determine the rights and responsibilities of each partner.

Intellectual property protection. Protecting your company’s IP is vital, but it can be expensive, and some startups tend to neglect this protection when operating on a shoestring budget. Consulting with a business lawyer about the right IP strategy for your business and your budget is the right move here.

Insurance. You will typically need property and general liability insurance for your company. Plus, if you have officers and directors, you may also need D&O insurance to protect them from business liabilities. You will also need to review your commercial lease to determine if there are any additional insurance requirements.

Regulatory compliance. Your business attorney can advise you on the regulatory environment for your industry as well as familiarize you with the policies and procedures you need to have in place for governing your relationship with employees and independent contractors.

Johnson Legal PC founder Adrian Johnson, Esq., worked on Wall Street for many years, where he bought and sold over 100 companies. He has built his law firm with experience and technological savvy to ensure clients have 24/7 access for their business legal needs. Contact us to learn more about how a great corporate attorney can help your business thrive.