6 Legal Issues Commonly Faced by Startup Businesses 

Smart startup entrepreneurs who desire to be legally sound will seek out a skilled startup lawyer to help them plot that course. If you’re in the early stages of planning a new business venture, here are some of the common legal issues to consider…

Business Structure

The business structure that you choose will be the framework for your startup for the first few critical years of change and growth. From the streamlined sole proprietorship and partnership to an LLC, corporation or cooperative, the choices are highly dependent on how you want to grow as a business as well as financially. For instance, taking on investors is often a part of a startup structure and how you expect to grow over the first five years can also help shape the decision.


Every startup will deal with a range of issues surrounding compliance, but they will vary based on their industry sector, state, and a host of other factors. Federal compliance brings its own separate set of issues that is dependent upon business sector and what you do in terms of products, services, and method of sales among others.

In short, ensuring compliance is an ongoing effort that starts with the germ of a business idea through every evolutionary stage of the business. A business lawyer for a startup is crucial at each of these stages as they can keep up with the changes in the law as well as the changes in the business to ensure compliance.

Employee Legal Issues

Employee legal issues run the gamut from setting up the employee handbook and compensation to non-disclosure agreements and a host of other issues. Whether you start with employees or plan to add them as the business grows, you need to have a plan and structure for dealing with all of the legal issues that come with employees before you get started.

Protecting Intellectual Property

Everything from the name of the company, your logo, slogans, and website to products, services, and design patents are all part of the intellectual property (IP) that you must protect from the day that they are conceived. Trademark searches, patent filing, and copyrights are only the beginning as you need to also monitor the marketplace and social media for violations of your IP that can mean disaster for your business and your brand. A startup lawyer that is skilled in IP is crucial to making sure that nothing is overlooked, and your IP is protected nationally and internationally.

Structuring Partnership Agreements

Many new companies fail due to the fact that there never was a well-written partnership agreement in place that spelled out the duties and obligations of each partner and covered all issues that could have arisen in the future. Things like unanimous partner decision frameworks, equity and asset division and many more must be tackled and addressed in a comprehensive partnership agreement at the outset of forming the partnership.

Non-disclosure Agreements

Sharing proprietary information with third parties and employees may require the development of a non-disclosure agreement. This type of document must be highly detailed regarding the specific proprietary information and the rules governing its sharing. The price for not doing this correctly could mean loss of IP.

The wise startup entrepreneur understands that while he or she may be capable of going it alone on the legal front for some of these issues, they see the insurance benefits of having a trusted lawyer for business startup safety that also frees them to concentrate on business development.

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