You have the greatest business idea ever. You’ve performed some financial wrangling to access start-up cash. Now, you’re ready to launch your business. You’re probably ready to dive right in and open your doors (whether literally or virtually). The last thing you want is to deal with more red tape or paperwork. It’s tempting to perform a bit of cursory internet research, decide that all of your t’s are crossed and your i’s dotted, and you’re good to go.
According to the internet, you’ve taken all the right steps. So, what could possibly go wrong? Unfortunately, almost everything. Here’s why you shouldn’t rely upon internet research before operating a business.
Is your corporation properly formed? There is a sequence of steps and standard documents that are required for your company to be properly formed and the stock issued to the Founders. If any of these steps is omitted, fixing them may range from easy to not possible without serious implications. The online incorporation platforms may seem like a good idea, but I run across them somewhat frequently and it almost always costs more to fix the mistakes than it would have taken to do it right the first time.
Have you made any “handshake agreements”? Are you basing anything with regard to your business upon promises made by others? It doesn’t matter if it’s your parents promising start-up cash, or your best friend who is supposed to help you renovate an office space. Absolutely any promise upon which you are basing your decisions must be well-defined and written into a contract. This is both for your protection as well as the other person’s. It should not be viewed as an offense, but rather as a proactive step.
Have you hired your employees correctly? If you are in California, there are a plethora of employee protective provisions in the law and mistakes here are expensive. Also, you need to make sure all of your employees and consultants have transferred the rights to the intellectual property they create to the company.
What about the technicalities? When it comes to business operations, there are simply too many technicalities to even count. Lawyers, MBAs and other business-minded professionals spend years in graduate school, and even they don’t have all the answers at their fingertips.
An ounce of prevention… Business planning attorneys have witnessed just about every imaginable situation in the course of launching a start-up. Not only do we know the ins and outs of the law; we know about the unexpected missteps that can happen. Never is this truer than in the case of lawsuits; so many business owners fail to contact an attorney until after they’ve been sued. At that point, all we can do is damage control. Contact us before that happens, and we can often help prevent those situations.
If you think you’re ready to launch a start-up, give us a call. We can likely help you identify a few potential liabilities that you might have overlooked, and show you how to mitigate or avoid them.