Avoiding the startup legal pitfalls

Guest Blog by Andrew Wood
(Summary of the talk given at Norwich Startup Masterclass, Jan 16th 2012)

Aimed at early stage businesses and those looking to launch into startup life the session aims is to give an introduction to what you need to think about and the options out there.

One of the biggest issues that startups face is coping with the legal aspects of setting up and running a business. From the outside this can look pretty arcane and frankly a bit dull but it needs to be handled correctly or you risk facing major problems as your company develops. Whether it is protecting your idea or structuring your business to minimise risk, these are all decisions that need to be researched and thought through when you begin.

The law is also one of the areas where businesses often struggle most to find impartial, non-technical advice that sets out the options tailored to their own needs. And while the web can provide background information, nothing beats a face-to-face conversation that allows you to ask (and get answers to) your individual questions. Every business is different.

With BusinessLink moving solely online, there’s even less free advice available, hence this month’s Norfolk Startup Masterclass session focusing on How to avoid awful muddles and other legal nasties. In the talk, I’ll go into more detail on the legal decisions you need to take at all stages of the startup lifecycle.

Without giving too much away it comes down to what I call the 5 Rs – questions you need to ask yourself when setting up:

• Risk – how much am I happy with?
• Responsibilities – who am I responsible for? What are my obligations?
• Rights – What are my rights?
• Rewards/Return on exit or otherwise – What am I looking for?
• Relationship with others, particularly stakeholders and employees – How will these be managed?

Overall I’m going to take a ‘cradle to grave’ approach to running a business, so the interactive session will deal with the following aspects:

• How do I setup?
• How do we manage equity?
• Do I need a shareholders agreement?
• I am the company (NOT!)
• What basic contracts do I need?
• How do I keep things legal?
• How do founders avoid legal dead-ends when things go wrong?
• Key aspects regarding IP protection
• Key aspects regarding collaborations & employees

I’ll include a checklist of the sort of areas you need to look at – from creating a business plan to insurance, health and safety and IP and trademarks. There will be ample time for questions, and like all the Startup Masterclass events, time at the beginning and end for networking with the vibrant Norfolk startup community.

Andrew Wood, Consultant Solicitor, Birketts LLP

Andrew has extensive experience of acting on corporate and commercial matters including advising on the reorganisation of company structures, mergers and acquisitions, the incorporation of joint venture companies, advising on distribution and agency agreement terms and conditions, partnerships and LLPs,technology transfer agreements, competition law and company secretarial services.