When starting a new business, the “legalese” is often near the bottom of most founders’ to-do lists. Product development, relationship development, breaking the mold – these are the things that are going to help you penetrate the market, and they are the reasons you decided to become an entrepreneur.
But, starting a business is inherently a legal process. As a result, not only should the “legalese” not go overlooked; ideally, it should be addressed as early as possible. As an entrepreneur, the last thing you want is to find out your intellectual property is not protected or your company is not prepared to take on outside investment. While it might be easy to buy a corporation or LLC filing package from an online legal document company, there are several reasons why this is not the best option for most startup founders. Below are just a few examples that our Springfield business lawyer often deals with:
1. You Have Unique Goals as a Company Founder
Unique businesses require unique solutions. This is true for everything from software to legal documents. Whether your goals are to disrupt an industry, go public or change the world, your business plan has legal implications, and you need to be prepared.
2. You Have Unique Liability Risks Based on the Products or Services You Sell
Different business entity structures offer different benefits, and one of the primary benefits of forming a limited liability company (LLC) or corporation is the ability to mitigate the risk of personal liability. However, simply filing a form so that you can receive a certificate in the mail is not enough. From selecting the most-appropriate type of business entity to preparing all of the necessary documentation and considering your options for insurance, forming a new company is a process that requires critical consideration and strategic planning.
3. You Have a Unique Capitalization Structure or Aspirations of Securing Outside Investment
Will you be contributing cash to finance the business? Will you be contributing intellectual property? Will you be making a loan? What about your co-founders? Startup founders have numerous options when it comes to investing in their own companies, and their founding documents should reflect the type (or types) of contributions being made. A Springfield business lawyer can assist with properly drafting these documents.
If you have aspirations of securing outside investment, this is another issue entirely. Your business entity will need to be structured appropriately so that you can offer an attractive investment when the opportunity arises.
4. You Have Unique Jurisdictional Considerations to Take Into Account
Business entities exist under state law, and corporation and LLC laws vary from one state to the next. Whether you form your business entity in your home state or in a business-friendly jurisdiction such as Delaware or Wyoming (which, in itself, is not a decision to be taken lightly), you will need to tailor your organizational documents to the specific requirements of the applicable law.
5. You Have Unique Needs with Regard to Confidentiality and IP Protection
What intellectual property (IP) do you own? What IP assets will your company acquire? What information do you need to keep secret? These are all questions that will further influence the structuring and documentation of your business entity.
Contact a Springfield Business Lawyer to Discuss Your Business Options
If you are starting a business in Springfield or elsewhere in Missouri and would like more information about the steps involved in setting up your business entity properly for now and the future, you should contact a business lawyer about your needs.