Steps to Start-up Success
As a law firm which counsels many start-up businesses, we believe this information will help you protect your new business.
Incorporation It is an absolute must to incorporate. If you do not, all of your personal and family assets are at risk.
Multi-Owner Businesses One day in the future you or one of the other owners will want to leave the business and cash out your shares. You need a Buy-Sell Agreement to agree on how this is to be done.
Workers If you will use independent contractors (I/C), be certain this classification is correct. You will need a contract with I/C workers. The incorrect classification can personally subject you to severe penalties and interest. Please read our article.
Board Members Board members will want to be indemnified. Anticipate this problem and give them a contract.
Insurance Obtain the correct types and amount of insurance. Besides general liability and property coverage, think about cyber-risk, disability and life coverages.
Protect your names, data and methods
- Screen company/ product names with a Trademark search.
- Apply for federal trademark protection.
- Protect inventions through patents.
- Protect IP from leaving the company by using trade secrets protection with your vendors and partners.
- Use “CONFIDENTIAL PROPERTY” notices.
- When service providers sell you services, they must assign their rights to you or you do not own the rights (e.g., your web site)
Contract System Create form contracts to protect your right to be paid. Businesses’ needs vary by industry.
Short-Form Agreements with Employees Every employee should sign a non-negotiable form agreement that (1) they will not ever use or disclose any company confidential information, (2) the company owns all rights to ideas developed by employee such as inventions, and (3) the employee shall not solicit any customers of the company for two years after leaving the company.
Workers Compensation Insurance Acquire Worker’s Compensation insurance for your employees. Illinois requires all employers to carry this insurance.
Follow Corporate Formalities Corporations must use certain procedures to maintain their legal shield. For example, do not commingle business and personal money. An article I wrote describes 33 such requirements. We will happily send this to you.
Business Plan and Budget Even if it’s only 5 pages and not written by a consultant, it will be very valuable to state your plan and create a preliminary budget.
Ownership of Your Website and Code Unless you have a contract with your web site designer and software developer and unless the contract states you own the code you do not own it. Get a proper contract with the needed language in it.
Lease Many important obligations and restrictions are in your real estate lease. These are often not in plain English. If you negotiate your lease well, you will avoid undue worry. Pay close attention to your lease terms.
Bank Borrowing Banks use complicated legal language in their loan documents. You can negotiate away some of these risks to prevent the bank from calling the loan. Be sure you understand these potential problems before signing. Get any loan commitment in writing.
If we can help you with your new business venture or you would just like to talk to us, please call our office or send us an e-mail. References are available upon request.
We wish you the best of luck with your business!
Charles B. Brown
About Charles Brown, Esq.
Charlie is a 30-year, accomplished attorney for businesses in diverse industries nationally and internationally. He specializes in IP (patent management, trademarks and trade secrets) and corporate law. He counsels start-up and developed companies, particularly small and medium-sized.
Start-up Business Testimonials
When we were launching our new company, Charlie was referred to us by a partner of a white-shoe law firm who had done work with him in the past. Having started several new ventures previously, I knew the role we wanted our corporate attorney to play, and Charlie fit the bill precisely. At the outset, he listened carefully to the objectives of each of our capital partners and then laid out an organizational roadmap for us that was balanced, concise and on point. Throughout the process of negotiating our partnership agreement, Charlie offered both highly professional advice and considered recommendations based on his past experience, which allowed us to quickly reach a consensus on matters that otherwise might have become contentious. He is a practical, commonsense legal practitioner who delivers high-quality, cost-conscious work product. Charlie receives our highest endorsement.
-Bob D., Partner, Strategy Consulting/Merchant Banking Firm
“When setting up my consulting firm and structuring contracts with clients and other firms, I needed legal support for traditional reasons (e.g., operating agreements, contracts) as well as understanding the legal arena relating to professional services and more specifically, consulting services.
Charlie’s deep experience in providing counsel to consulting firms was particularly helpful to my colleagues and me. He balanced a refreshing level of pragmatism with keen insight into potential issues and opportunity areas, and offered alternative courses of action. He helped me to understand the business implications of these actions. Given his expertise in advising both consulting firms as well as corporations (my client base), he was able to see both sides of a legal position and help me to negotiate a reasonable outcome for both parties. In addition, Charlie was particularly effective at working with many stakeholders with different personalities and objectives, including client executives, attorneys, and members of my firm.
I would not hesitate to recommend Charlie to other consulting firms.”
– Pete S., President of Strategy Consulting Firm
“I was a partner in a technology consulting company and I engaged Charlie Brown to help me research a potential business issue with my partners. Accomplishing the project promptly was crucial and the outcome was highly important to me personally. Charlie quickly assessed the relevant issues in the documents and enabled me to make an informed decision”.
– Tom C., Partner, Technology Consulting Firm
“Charlie has assisted me on several occasions involving the start-up and continued operation of my business. For example, Charlie was instrumental in the determination of the right corporate structure for my company. He thoroughly explained the pros and cons of the relevant options, and assisted me with making the right decision. On an on-going basis, Charlie has routinely ensured that my company is in full compliance with state and federal regulations. It is a great comfort knowing that Charlie is overseeing many of the legal aspects of running my business, and it is one less things for me to worry about. In short, Charlie’s knowledge of business law and his depth of experience, coupled with the responsive and personal service he provides, all contribute to a strong and valued business relationship. I highly recommend Charlie and his firm for your legal needs.”
– Tammy H., CEO, E-commerce and Consulting Firm
“After over 20 years of working for bigger firms and other people, I elected to establish my own consulting firm and needed help all the relevant and necessary organizing documents. Importantly, Charlie helped me separate cleanly from my prior organization and, as is usually the case these days, this separation contained several challenges with important and large financial consequences. Charlie helped advise and negotiate a successful split and helped me focus on moving forward. Further, Charlie helped advise me on the ongoing tasks in the successful operation of my firm.
Charlie is a very good listener and has a wonderful personal style which put me at ease and gave me great comfort. He is highly credible, has been around the block and is fully engaged. He is my go to guy for all legal issues.”
– Roy H., CEO, Executive Recruiting Firm