Legal issues are among the top reasons that startups fail, so you need to make sure that while you’re out “doing,” someone with a law degree has your back. Even if you think you’re too small to worry, too lean for extra costs, or too agile to get slapped with a lawsuit, legal trouble can run enterprises of any size into the ground.
Beware of these five legal slip-ups that can kill your fledgling business:
1. Ownership issues
What begins as a mutual understanding between co-founders can snowball into a massive lawsuit over company custody, as was the case with Facebook or Snapchat. Get a legal professional to help you craft an ownership document right from the start. If you don’t, you may be plagued by disagreements as you grow.
2. Trademark infringement
Right off the bat, get an attorney to check that your company or product name isn’t currently being used in your space. A simple Google search isn’t enough because old and unused trademarks often don’t show up but will still be fully enforceable. If you gain notoriety and the owner of that trademark takes notice, you might have a liability time bomb on your hands.
3. Intellectual property (IP) protection
If your business involves inventions of any sort, even if it’s a proprietary way of doing things (like a recipe), designs (like a logo), or literary or artistic works (like books, photography, illustrations, or film), you’re going to want to protect them. It’s the only way that you’ll be safe from others claiming your work as their own and even patenting it themselves. Patents take a long time – sometimes years – so talk to a patent attorney right away.
4. Unpaid taxes
Did you know that many entrepreneurs need to pay quarterly self-employment taxes? Or that you need to separate your business and personal accounts? Get on the good side of the IRS and get a tax professional to put your finances in order and keep you from getting blindsided by massive fees during tax season.
Lawsuits can tank your business even if you don’t lose them. Just ask Gawker, who was bankrupted not just by a guilty verdict, but by the legal fees that piled up during the case. Protect yourself by seeking periodic legal advice (which can easily be found on Fiverr) about big changes, hiring, firing, and public announcements.
What startup legal troubles have you run into? How did you solve them? What should every entrepreneur consider? Share your tips in the comments below.
The post 5 Legal Slip-ups That Can Kill Your Fledgling Business appeared first on .