So you have a great business idea but don’t know where to start? There will be so much information that sometimes the most basic legal considerations can be missed when creativity rules. However, here at Nockolds we believe prevention and education on these basic principles are much better than a cure when things go wrong so consider implementing or consider the impact of the following:
1. Have I protected myself properly?
This could mean any number of things. You may be speaking to people all the time about this fantastic idea, but can they be trusted? Ideas themselves cannot be protected, only the expression of the ideas, so consider putting in place a non-disclosure agreement to allow all parties involved to speak freely, knowing you have the comfort of keeping your ideas under wraps.
2. Do I own my intellectual property rights?
You may have commissioned someone to produce a logo, database, mobile app and so on for your business. Sometimes the terms and conditions of the provider may not actually allow you to have complete ownership of such things, so you need to watch out for that. In addition, the law can indicate that where someone is commissioned, there may become more than one owner, so always check terms before you sign them and get advice if you think there is a problem. The intellectual property rights could be the only valuable thing you have from the start of the company so it makes sense to protect it from the outset.
3. Investor woes
Its probably likely that you have a family member, best friend or even if you are lucky enough, an outside backer who wants to get in on your big ideas as the business develops. Great news for you of course! But have you considered how you are going to manage this investment? People will want to see results and often to keep all parties happy, you may want to have an agreement drawn up to state how you can properly deal with the investment. A shareholders agreement, with a subscription (or in other words in exchange) for shares, may be the best way forward.
4. Don’t give it up at the first sight of investment
Seriously think long and hard about what you are giving away if there is an investor. What is right for each company will vary, but time and time again we see lots of fledgling companies where entrepreneurs have given away so much of their share capital, meaning they lose various decision making. This gives you less and less control, and could be very frustrating for a rising entrepreneurs such as yourself.
The moral of the start up story is to make sure all bases are covered. Ignoring important legal aspects can lead to problems down the line. Even if you hate dealing with solicitors, you have not met us yet, so give us a call. We understand your struggles as a start up, and welcome the opportunity to work with you.