Have you thought about the legal issues involved in launching a Startup on the market? Are you worried about partner agreements or contracts with customers and suppliers? Launching a startup to the market is much more than having a good idea and finding a way to make it profitable.
The legal issues behind it can become a problem if they are not taken into account from the start.
The 10 legal keys to launch your Startup to the market
We are currently immersed in a business revolution. With the appearance of the term startup, the traditional business model has evolved, giving way to a new entrepreneurial sector with great potential. The creation of these new and innovative companies is booming .
Anyone can have a good business idea and want to create their own company, but many times they lack the training or information necessary to carry out our projects correctly and legally.
What should we do or not do so that our startup complies with the legislation?
In this post we give you the 10 points that you must take into account to properly tie all the legal part of your company.
1.- It is always better to associate with people you trust and that you know well
Starting a business is not an easy task, especially when there is money at stake. From the first moment the doors of the business are opened to the public, it is when differences and different commercial interests between the partners may arise.
To avoid this, it is important to associate and start a business with people who share the same values and ideologies as you. A partner is not only a person who contributes an amount of money, but is also someone who is there when something does not work and helps at all times to move the business forward.
Therefore, it is important that your partner or partners also have some experience, professional preparation and entrepreneurial commitment and above all that they form a true team that works together.
2.- It is necessary to sign a detailed contract with your partner
An essential requirement when starting a business is the signing of a partner agreement, detailing the operation of the company that has been agreed between them. In the long run, this can save us headaches and a lot of money.
But what happens if one of the partners breaches the agreement?
Imagine that you have a company with other partners, and that when you set up the business you agreed that after a few years you would make a capital increase, but one of the partners refuses to comply.
We find different possibilities; demand that they comply with the agreement, since otherwise the other partners will be affected and you will have to contribute more capital, modify the contract in the event that you all agree, or in an extreme situation, you can exclude them and distribute their shares.
3.- It is not a good idea to associate with a 50-50 participation between partners
The most logical thing when creating a business between two partners is that both obtain the same percentage of shares in the company.
But this in the long term can be a problem.
[piopialo vcboxed=”1″]A 50% split between two partners can cause many headaches[/piopialo]
If the company grows and important strategic decisions need to be made, the decision of one of the two must prevail over the other. Therefore, it is necessary for one of the two partners to have more executive decision-making power.
4.- It is important to take into account the tax issues of the company
To avoid possible tax problems, it is essential to determine at the outset how the company will be incorporated. It can be in the form of a natural or legal person.
Each of them has specific characteristics and prevents the business from being put at risk due to a bad decision and from having to bear tax problems even if the project fails.
Many businesses decide to incorporate for different reasons; to protect your personal assets in case of a lawsuit imposed by the other partner, to be able to obtain loans easily and safely, to provide credibility to your customers and suppliers, among others.
5.- With the creation of a new company it is essential to have the essential contracts
Many companies do not believe that the creation of essential contracts is necessary, since they see it as a waste of money. But in reality, it is an investment.
It is very important to include legal protection for the company, since it can prevent us from taking a lawsuit and paying twice what it would have cost us to create the essential contracts at the beginning of the business.
These types of contracts are important, to be able to corroborate, in case of mismanagement, problems with customers, partners or suppliers, or other issues that may arise, to be able to demonstrate that the company is right, and avoid unnecessary judgment, and that also without these contracts we can lose.
6.- You should never make verbal agreements with customers or suppliers
A very common mistake that can bankrupt many businesses is not believing that it is necessary to sign a written contract with their clients and suppliers, and trust that they will comply with their payments and collections agreed only verbally.
This in the long term can be a problem, since if your clients and suppliers do not comply with what you have agreed, you will not be able to justify it before a judge, because there will be no contract to corroborate it.
Therefore, it is very important to establish business transactions in writing, and not assume from the beginning that everything will go according to plan.
7.- You must take into account intellectual property. It is essential to register trademarks, slogans and works of authorship
It is essential to protect your ideas and the identity of your company, to prevent another business from copying it, and ending up confusing potential clients. In addition, registering all your intellectual material is an advantage since it allows you to grant licenses, collect royalties and assign your rights.
But why is it essential to register a trademark?
Imagine that you have created an advertising startup and you have launched a campaign with a slogan similar or the same as that of another company in the same sector. If your company does not have the slogan registered but the other company does, it can sue you and demand that you pay copyright.
8.- Choose a name for the company that does not have brand or domain name problems
Before choosing a name for your company, it is important to do some research to find out if the name you are interested in is registered. This way you can avoid trademark or domain name infringement. As well as, that your clients and users confuse it with another.
What are the consequences of choosing an already registered name?
We put the case that you have created a startup and you have given them a name that is already registered, if the other company finds out, they can resort legally by filing a complaint. If this is the case, your company will be forced to change its name.
9.- Ensure business confidentiality
We are at a point where communication and information spread rapidly, but this can be a problem for our business and our projects.
If we do not have the necessary protection and contracts to ensure that it is fulfilled, our business may be at risk, since at any time all the industrial secrets that give the company a competitive advantage over other companies of the same may come to light. sector.
Failure to comply with a confidentiality agreement means paying compensation based on the damage and prejudice that the disclosure of the information may cause to those affected.
10.- Not having adequate Conditions of use and the privacy policy on the web
When we talk about Terms of Use, we refer to the terms and conditions that the company imposes on anyone who uses the website or the App.
And the privacy policy refers to the legal declaration where the conditions of use of personal data collected from users and customers are established. It is important to comply with data protection legislation to convey trust and legality to your users and customers.
If you want to create a startup that also complies with current legislation, it is important that you respect the 10 requirements that we have provided.