Starting a startup in Los Angeles can be daunting, especially considering all of the complexities surrounding intellectual property, taxes, partnership agreements, and so much more.
At the beginning of starting a startup, founding members are usually solely focused on getting their product or service to the market.
Although this focus is important, it is also wise to focus on long-term strategy and protect yourself from adverse legal actions and consequences.
Here are 3 top critical ways a startup lawyer in Los Angeles can help your startup to safeguard your startup's future...
1. Establishing the Best Legal Entity for Your Startup
If you plan to raise venture capital money, you should definitely create a C-Corporation rather than a Limited Liability Company (LLC) or Corporation.
For entrepreneurs, C-Corporation is the most wise choice among startups who wish to raise money from investors.
A C-Corporation is able to issue shares of stock which can be extremely useful if a startup would like to bring on new investors.
If a startup is only interested in getting the business going with little to no share of equity then a simpler business entity such as a partnership or sole proprietorship would suffice.
A limited partnership may be an even better legal structure, as it calls for a partnership composed of both a general and limited partner where the limited partner is solely acting as an investor and the general partner manages the day to day operations of the business.
However, while the limited partner will have limited liability for any debts incurred by the business, the general partner still holds unlimited liability and is taking a huge risk for the business. The limited partner can still lose his or her liability if he or she becomes involved in any of the business operations.
While forming a new startup as a sole proprietorship can be as simple as setting up shop, forming a startup as a corporation requires adherence to many specific rules and regulations.
If you still haven't formed your C-Corporation for your startup, contact me, Sam Mollaei, Esq. and I can assist you with formation of your C-Corporation.
A startup lawyer will help you choose the entity that is best for the long-term so that you won't have to change it down the road and incur additional hassle and expense.
Corporations also need to conduct annual meetings of the board of directors to take vote and discuss pertinent business decisions. Annual reports must also be filed in a timely fashion along with up-to-date record-keeping.
In Which State Should You form Your C-Corporation?
You should form your C-Corporation in the state where you will be conducting your business. If you're looking to get investor funding for your startup, then I would suggest forming your Corporation in Delaware as most investors are more familiar and more comfortable with Corporations formed in Delaware.
You can read more about which legal structure is right for your startup here.
2. Protecting Important Intellectual Property
Putting safeguards in place to protect your intellectual property is imperative for the success of your company.
Intellectual property is generally defined as unique items created by you that will provide economic benefit. Intellectual property includes trademarks, copyrights, and patents on your original works, designs, and inventions.
A trademark lawyer will assist you with setting up the proper intellectual property security so that you can avoid expensive litigation in the future.
For example, you can guard your logo or brand by having your business attorney register them as trademarks with the U.S. Office of Patent and Trademark.
Besides, if a competitor copies your logo or brand, your business attorney can send a cease-and-desist letter and immediately stop any further damage to your trademark.
Taking shortcuts on intellectual property at the beginning of your business and not getting the proper protection could cause irreparable harm to your brand in the future.
3. Reviewing Complicated Legal Documents & Contracts
Starting a business usually, involves dealing with large amounts of paperwork.
Having a lawyer to work with you in the startup phase helps ensure all documents, both created and received by you, are correct, and makes sure that all of your interests are covered.
Typical documents dealt with in the initial phases are contracts, insurance policies, and partnership agreements.
A partnership agreement can be particularly important as you contemplate common issues among startup founders such as division of responsibilities, equity splits, and profit sharing.
Although many generic business contracts exist on the Internet, an advocate focused on your circumstances will make sure the documents you use to provide the unique protections needed for your particular situation.
Los Angeles Startup Lawyer
You may have started with an incredible idea and a high chance of success, but without adequate counsel, your startup could be on a direct course for burdensome expense and stress.
Consult with Sam Mollaei, Esq., an experienced startup lawyer from Mollaei Law firm will help secure your company and save you from costly litigation in the future. You can reach him through his email at Sam@MollaeiLaw.com or his phone Number: (818) 925-0002
Mollaei Law is a law firm specializing in business law serving businesses and entrepreneurs. We provide legal expertise in all stages of business development by drafting and reviewing contracts and agreements, assisting transactions and negotiating, forming LLC's and Corporations, registering trademarks and copyrights, business planning, and answering any legal questions you may have about your business.