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Right from the step of incorporation of a company, an entrepreneur faces wide range of legal issues, it could be negotiation with investors, getting the requisite license and permits, setting up a legal entity in their state, modifying investment contracts and much more. Businesses which are new in the ecosystem also have to interact with statutory authorities, such as those responsible for issuing of licences or collection of taxes. Along with this, start up lawyers often have special expertise in assisting startups with protecting their intellectual property, ensuring compliance with local and federal laws and drafting employment contracts.
Being an entrepreneur, we need to have a reliable legal counsel to protect oneself from liabilities and to ensure that the parties whom we enter the contract with, also perform their functions well and adhere to the contract. With many benefits, which we will be discussing below, a start up lawyers eases the burden from the entrepreneur’s shoulders so they can take care on the core mission of their firm, leaving the legal side entirely to the start up lawyers.
Why would a firm which has just begun its operations require a legal support? We may come across this question. Well, the answer is simple. Our legal entity will form many contracts with outside parties, these often pose risk to our establishment, and that is where a start-up lawyer comes in., they protect our entity from these risks. A start up lawyer can mitigate risks by ensuring that the establishment complies with all the relevant laws, and has proper licenses and tight & clear contracts with the other parties. Along with this, for any firm, whether new or old, securing the intellectual property is a must. For every start-up, especially in the creative industry such as music or literary, the need to register a trademark or patent can arise from the very first stage.
Let us now dig a little deeper to understand the role of a start up lawyer in the initial phases of a company. when business is first begun, our primary aim remains on offering the goods and services, maintenance of our supply chain and adoption of proper and feasible technology. while all these aspects are crucial for an organisation, they also need to acknowledge the legal strategy to adopt which will certainly have an impact on their company. Hence, the role of a start up lawyer can be distinguished as below-
Incorporation of a company:- When an organization is set up, it has to categorise itself under one of the business structures, whether it be sole proprietorship, partnership or an LLP, or a corporation. A lawyer can advise business entrepreneurs on which structure will suit their firm the most. They can also facilitate the in educating the entrepreneurs about the structure of investment that should be made in their company. Even while raising funds from investors or capitalists, a legal professional is required. For every founder, stakeholder, and investor in the company. It is important to agree on all the rights, obligations that will constitute the investment agreement. This is where lawyers can use their powers of negotiation to come to an agreement and illustrate to their clients the ramification of the associated rights and obligations.
Drafting of contracts:- Our business entrepreneur is in no way a one-man show. They need a co-founder to support with the operations and business expansion. Here, a lawyer can be used to assist in figuring out how to balance the co-founders’ benefits, rights, duties and other obligations. Drafting of contracts is another important task which occurs during the incorporation phase of a company. The process of executing relevant contract at the appropriate time builds strong trust in the entrepreneur and also safeguards their business. Contracts are only made when parties enter an agreement. A lawyer allows the different parties involved to come to a unanimous solution with their negotiatory powers. Consulting a lawyer to understand the business needs for the website T&C, client/vendor agreements, and shareholder agreements can be beneficial for the growth of the business.
Formation of labour and employment laws:- Our organization’s labour laws play an important role in creating a framework for the organization on which the relationships among employees, employers will work. Labour policies provide a clarity to the employer to create a system with consequences for activities that infringe on an employee’s rights. Lawyers allow in assisting entrepreneurs in understanding the employment policies of a company, including those related to termination, pay and compensation and paid and unpaid internships. In an organization, employees’ rights have utmost significance. It drives the growth of an organization. For a firm having apt employee policy will also observe their growth in a positive way than the ones having a policy which is disregarded by their own workers. Sometimes, these policies also raise conflicts, under which a lawyer may be called to negotiate between the employer and the disgruntled employee.
IP Laws:- Most start-ups are built on innovation and invention, which makes it important to safeguard the entrepreneur’s intellectual property, hence prohibiting others from generating revenue from the entrepreneur’s business. Lawyers allow the organization’s owner to understand the best possible protection for their ideas and innovations. In many cases, lawyers do so by designating multiple parties who claim ownership of the same invention as joint inventors. Moreover, for every entrepreneur, it is important to note, that before choosing any brand or logo, it is necessary to engage with the lawyer. They can advise properly on the preferred branding which is available and how it an be used so as to not being accused of stealing intellectual property from an already-existing business.
Data protection laws:- The modern times has increased our use of technology. Today, there lies rarely any sector which does not employ technology and its components in their functions. But as we know, where technology travels, the fear of data breaches follow too. In such case, it is important for a business owner to consult with their legal expert to learn about how to comply with the current data protection rules of their country, and how to organise their company to withstand any changes to the data protection regime.
To conclude, we can say that a start-up must go through lot of hassles, and a complex legal system in order to ensure that the establishment so created, is in compliance with the relevant laws. Even the contracts which the legal entity enters need to be made in such precise way that it considers the rights and obligations of all the parties involved in it. And being considered a creative invention, a start up also has to consider the concerns related to IP laws. Hence, employing a start up lawyer always comes as a boon for a new born organizations, as they can help an entity from the outset including with incorporation, negotiations with co-founders and investors, compliance with labour laws, protection from lawsuits, and much more.
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