13 Biggest Legal Mistakes Startups Make
By Advocate Atit Jain / 2017-03-16
Setting up your startup involves a lot of work and effort. Many things need attention, including developing a proof of concept, finding product/market fit, and hiring the first set of employees. A multitude of situations must be handled, hence slips are bound to happen. One of the most common areas where most start-ups make a wrong choice is establishing a solid legal foundation.

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Setting up your start up involves a lot of work and effort. Many things need attention, including developing a proof of concept, finding product/market fit, and hiring the first set of employees. A multitude of situations must be handled, hence slips are bound to happen. One of the most common areas where most start-ups make a wrong choice is establishing a solid legal foundation.

For start-ups, particularly in the sectors like e-commerce, payments, food or health care, it becomes all the more important to focus on the legal aspect. You don’t want to make the same mistakes as someone else, rather learn from it, isn’t it?

Legal issues are often at the back of an entrepreneur's mind in the excitement of launching a start-up. But just because you are small doesn't mean that people are going to let things slide when you infringe upon their trademark or don't tell the full truth to investors. We are going to introduce you to the most common legal mistakes early start-ups make and how to keep the personal injury lawyers away-

1. Wrong Legal Entity

Choosing the right legal entity right at the outset is important. Some structures to choose from include a Registered Company (Public/Private Limited), LLP, proprietorship, and partnership. The more widely accepted one is a registered company, especially for any deals with foreign clients. Go for a Limited Liability Partnership or a Private Limited Company if you do not want personal liability for the losses/liabilities of your startup. Choose the right form of legal entity to avoid any legal hassles and payment of higher taxes.

Setting up your startup involves a lot of work and effort. Many things need attention, including developing a proof of concept, finding product/market fit, and hiring the first set of employees. A multitude of situations must be handled, hence slips are bound to happen. One of the most common areas where most start-ups make a wrong choice is establishing a solid legal foundation.

Have a Legal Issue?

Get connected to the Best Lawyers and Chartered Accountants Near You!


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