Starting up your own business is the ultimate dream. It’s great to be your own boss and no longer feel like questioning if the years you spent working as an employee for someone else have been worth it. As exciting as launching your startup can be, it’ll also come with a huge responsibility. Before, as an employee, you had a job description that had certain responsibilities. If you used to work in finance for example, you most likely knew nothing about HR or operations.
When building your startup, this won’t cut it. You will find yourself learning about all the different activities that make up a business. Of course, you will need to hire experienced people to help you, but eventually, you will be the one who calls the shots. Unless you have some legal background or prior experience as a lawyer, you will find that the legal aspect of starting your own business is quite challenging.
Given the basic requirements of being an adult with full mental capacity, there are some other legal requirements that you will need to comply with in order to launch your startup:
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Type of Legal Entity
This is the first order of business. The type of requirements you will need to fulfill will defer from one structure of business to another. You will need to discuss them with your business lawyer to find out whether you are starting a sole proprietorship, a limited liability company (LLC), or a corporation. For example, if you raised the necessary funds by bringing in an investor, they would need to own a part of your business. A sole proprietorship won’t be an option then.
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Issuing a Trade License
This is permission to practice by the concerned authorities. You will need to have proof that you have the right to practice. This includes the space, technical expertise if needed, and proper certifications. Usually, you can find such information online along with the relevant forms, but it is advised to seek a legal service provider to take over.
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Registering Your Brand and Trademark
This is your identity and how you will be known in the market. Registering your trademark will protect you against others trying to infringe your brand and benefit off of it. You will need this at an early stage, as it will allow you to seek legal action should such cases arise. Starting up a business without a registered trademark or relevant patents will make you an easy prey for huge corporations.
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Drafting Hiring Applications and Contracts
Your hiring applications need to be legal and abide by the law. When it comes to the information you are asking applicants to provide, some countries prohibit employers from asking about age during the early stages of hiring. So, you need to ensure you are aware of the legality of such forms and stay compliant. Also, contract clauses that cover non-disclosure agreements and competition need to be drafted legally in order to avoid risks of lawsuits.
It is important to thoroughly understand all the legal aspects of starting a business. Building your startup on a strong legal foundation will protect you from losing money and time relevant to paying fees and penalties, and these things tend to become big headaches in the long run.
