Legal Questions Startups Should Ask

For start-up entrepreneurs, the most important expectations of the company`s legal form are that it is flexible; This means that it allows shareholders to freely attach variable rights to shares (earn, vote, participate in the share capital). Once you have started the business, you need to take care of it, i.e. carry out the necessary maintenance work required in your respective jurisdiction (whether to call periodic general meetings or file tax returns). There are four basic types of businesses: sole proprietorships, partnerships, limited liability companies and corporations. Both have advantages over the others (mainly in the area of financial responsibility). Incorporation into an LLC or S Corporation protects your personal assets in the event of a liability lawsuit and your business accumulates debts that it cannot repay. However, you should think carefully about the tax status that best suits your business. If you need help deciding, an auditor is probably your best choice. Ellen Ehrenpreis is a tech startup partner at Orrick in Silicon Valley. She has spent over twenty years in the technology and venture capital ecosystem, leveraging her extensive network and deep understanding of the technology industry and legal landscape to effectively and strategically advise emerging companies and investors on a variety of critical needs. On the corporate side, Ellen`s clients range from start-ups to mature private companies. She advises companies and founders in the areas of start-ups, venture capital financing, governance, mergers and acquisitions, corporate and securities matters, commercial transactions and litigation strategy.

Ellen`s approach is holistic and pragmatic. Her unique skills and business-oriented approach stem from her decades-long career as a Silicon Valley lawyer and her extensive experience early in her career as a successful litigator and business owner. Ellen also works closely with some of the leading venture capital and growth capital firms, advising clients on financing, equity structuring and corporate governance. Ellen`s enterprise clients represent a wide range of the technology ecosystem, including hardware and software, and their industry experience is therefore extensive. Its clients include semiconductors, SaaS, renewable energy, fintech, aerospace, digital retail, online sharing, biotechnology/biopharmaceutical, media, data design and analytics. It can be accessed through Orrick`s website. Companies must ensure that the employee and company sign the letter and all documents from day one (e.g., IRS Form W-4 for withholding and legally required Form I-9). From time to time, it is possible that a legal question arises in an area of law in which your lawyer may not be an expert. Your company is responsible for understanding all of these laws and ensuring that applicable rules and regulations are followed. Failure to do so can expose your business and expose you to fines, penalties, and other legal liabilities. It can even lead to the complete closure of your business.

Ignorance of the law can hinder the growth of your business, expose you, your employees and your customers to significant liability risk, and even expose you to legal risk if you are too much in conflict with regulations. So, before you jump into owning your own business, here are four big legal questions you should ask in order to stay on the main road at all times. Anything you can get through this lawyer should be thoroughly investigated. Early-stage startups have very different legal needs than mature startups. For start-ups, the focus should be on building a legal infrastructure for the business; For early-stage companies, the focus is often on securities, financing, etc. Finally, as a business owner, you should have a trusted lawyer to help you answer any legal questions that arise during your day-to-day activities. This will help you stay on track and achieve the desired success. Some lawyers even allow you to write a summary of events for a legal case or summarize certain documents yourself. Start-ups that manage to avoid these legal missteps have a better chance of success.

When you start a new startup, you may face significant business and legal challenges. We have seen a lot of mistakes from entrepreneurs and start-ups. Venture capitalists and other investors in startups expect all employees of the company to have signed such agreements. In an M&A transaction where the business is sold, the buyer`s due diligence team will also look for those agreements signed by all employees. Whether you are in the software industry or your product is innovative hardware, keep in mind that through the eyes of the outside world, the value of your business lies in (i) your team and (ii) your intellectual property (“IP”).