By Kaetochukwu Udeh (OAL)
What Does a Startup Lawyer Do?
Before we dive into what a startup lawyer really does, it is essential to first of consider what a ‘startup’ is, the legal needs of a startup and the role of a startup lawyer.
What is a Startup:
So what is a Startup you ask? Well, according to Forbes, “Startups are young companies founded to develop a unique product or service, bring it to market and make it irresistible and irreplaceable for customers”. Startups have one goal; to sell their product, either goods or services to the public for profit. What makes Startups special is that they are designed to grow fast hence the interest they draw.
Wil Schroter took the definition of a startup to another level when he defined it as “the living embodiment of a founder’s dream”. In essence, startups are not just businesses but visions brought to life, legacies to be around for a very long time.
Do you need a lawyer for your startup?
Obviously Yes! And see why you need a good start up lawyer to help grow your business.
From incorporation to investment negotiations, startups have legal needs necessary for the success of their business. For instance, Startups find that they may have to deal with government established institutions, be it for issuance of licences or payment of taxes.
Secondly, risk management equally tops the list as your startup will need to be protected from various types of risk that arise in the course of dealing with third parties. Contract Drafting and Management comes in handy to avert risks, be it founders agreement or Non-disclosure agreement. Contracts are indispensable documents for any startup.
Intellectual Property Protection is equally key at the onset. Trademark and Patent Registration can also arise at the beginning of any business particularly those which are considered creative or deal with consumers and clients.
The Roles of a Startup Lawyer in Your Business
Still thinking of how and why you should work with a startup lawyer? These are the 10 top reasons you need a startup lawyer to support your startup
1. Identification of Risks
A startup lawyer helps your business foresee legal issues and also advised on how to successfully avert them. It is the role of a lawyer to ensure that your business is protected from the beginning. He/She analyses your business, proffers preventive solutions and manages the business risks. This is typically done by identifying key agreements that are needed especially in the beginning and advising on the same.
Registration, licensing, and authorisation are Fundamental for any business and a startup lawyer will identify the required licenses and approval for any specific business.
3. Company Type:
A Startup Lawyer will assist a founder or entrepreneur by advising on the best type of corporate structure suited for your business. Whether it is a sole proprietorship, Public Limited Company, Private Limited Company, Limited Liability Partnership (LLP) or group of companies. Please be advised that incorporating your business as a separate legal entity protects its founders from liability. A competent startup lawyer is equally skilled to advise on the legal requirements of having your startup registered in a foreign country.
Capital is the lifeblood of any business and founders think about securing funding usually from day 1. During the fund raising process, your startup lawyer will be able to advise on the best investment options, be it seed investment, venture capital or crowdfunding and advise on the structure (debt or equity). The startup lawyer will reflect the level of control you want to maintain as a founder in the board structure and voting rights. A startup lawyer will review investment agreements and advise you on any long term effect.
Any company starting out must make tax compliance a priority. A startup lawyer will be there to guide you through the sometimes rigorous process of taxation.
6. Intellectual Property Protection:
A startup lawyer’s job is to protect your business and ensure growth and sustainability. The lawyer will advise on the intellectual property to be registered and when Non – Disclosure Agreements should be executed.
7. Regulatory Compliance:
A startup lawyer will assist with identifying the specific regulation for your business and advice on compliance.
8. Website User Agreement and Data Privacy:
Most business now have strong digital presence whether it’s by having a website or social media presence. This also comes with its own set of risks and challenges. Your Lawyer will be able to draft the essential documents required to support your business digital presence or online marketing strategies. Eg website terms and conditions, personal data collection and usage.
9. Shareholding of Founders:
Startup lawyers come up with the share structure of the founders and spell out the conditions for qualification.
10. Drafting and Review of Contracts:
Contracts are imperative to Startups actualizing their vision. From investment contracts to founders agreements and shareholding agreements etc. Contracts not only averts risks but saves the startup from unnecessary loss financial or otherwise so that founders can focus on their product. Early Startups particularly the high growth ones will probably be seeking funding/investment, etc. An experienced Startup lawyer will be familiar with drafting and reviewing these agreements.
Consulting a startup lawyer at the early stage of your business is critical particularly if you want to save your business from legal issues that may come up. Startup Lawyers not only bring their legal experience to the table but their business experience and creativity having worked with numerous businesses. You can be rest assured that your business is in safe hands.
Start worrying about the business’s legalities as early as possible! Olisa Agbakoba Legal (OAL) will help you find a qualified startup lawyer to address and explain your needs so you can concentrate on growing a profitable business and lowering debts. In the long term, doing that would save you a lot of time, money, and stress.
So please feel free to contact OAL’s startup lawyers for a legal consultation.