- Some entrepreneurs believe that incorporation is something that should be done at a later stage. In reality, incorporating your company early can solve you time, money and confusion. For example, if one of your partners was active in the beginning and then steps away, for whatever duration of time, and comes back when the company is profitable, he could demand equity -- over and above what the rest of the team believes he's entitled to. Incorporate early and dole out the issuing shares to the founders accordingly.
- Laws change over time. Laws affecting your industry or business may change without your knowledge. Regardless, you may still be held responsible for non-compliance. Federal, state and local regulations can govern issues like environmental impact; safety, health and labor; and accessibility for disabled people. Subscribe to local government newsletters to keep up with city ordinances that may affect your business. Also, check sites like Regulation.gov regularly, to stay on top of changes in federal laws.
- The company's intellectual property could be its competitive advantage. Not protecting it could spell doom for your company. This includes the company's trademarks, logos and technology. Furthermore, many companies that have patented technology are surprised to realize that U.S. patents are only good in the United States, leaving them vulnerable if they do business overseas. Protect your intellectual property early and in every country you intend to do business in.
- Enforceable business contracts are essential to your business company's defensive and offensive strategies. Many startup businesses have trade-secret information they want to protect. If they fail to use a nondisclosure agreement, it may leave the company exposed. Additionally, business contracts missing "teeth" or enforceable clauses may make it possible for customers to get something for nothing. Hire an attorney experienced in dealing with startup entrepreneurs to cover your legal bases.
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