A balanced approach
Looking at the legal challenges startups face and the changes that are already shaking up the legal communities in Asia, there is an aspect of this entire issue that can sometimes be forgotten—considering the mindsets of startup owners and their legal needs. "Legal protection is important for businesses, but it is not always as simple as using a program that generates a draft of a legal document and hoping or assuming that it is the right type of document for your business". The best startup attorneys in India can help with the documentation process of the startup.
It might be more accurate to say that currently, we are in a middle ground, where technology helps to alleviate some of the basic and labour-intensive groundwork done by lawyers (which is normally charged directly to the client). But we will still need to see qualified lawyers giving legal advice to make the content of legal documents more suitable for their clients.
Situations where a Lawyer can provide important guidance
At the most basic level, startups need startup advocates in India to help them deal with the three groups:
- The Government: You don’t want to violate laws. You also need to be sure you are doing business in a way that doesn’t create unnecessary tax liability and that you pay the taxes you owe.
- Third parties and the public: It’s essential to make sure you take reasonable steps to control risk in your interactions with customers, suppliers, users, employees and the general public.
- Each other: When multiple people form a company together, it’s best to establish the rights and expectations of the founders upfront in case there are disagreements down the line.
Areas Startups really need legal assistance
- Incorporation : The incorporation of your business is the process of laying the very base on which your whole venture will function. You can’t afford to slacken in this crucial step. The registration of your company is a legal procedure and is best to be done under the supervision of an adept corporate lawyer. It includes a lot of legal paperwork which a lay person can’t be taken to understand.
- Government policies : The government lays down trade restriction policies from time to time. As a layman, you can’t be expected to know them, but business owners are expected to abide by them. You need a lawyer to guide you on the policies and restrictions of the government so that your venture is not in violation of any of them.
- VC and funding agreements: Getting a VC or an angel investor to agree to fund your idea is one of the main start up goals. But there are a lot of legalities and agreements to be taken care of this extremely important step. Failure to do so properly with proper legal guidance might result into you losing your venture at a later stage.Term sheet formation, due diligence, investor agreements lay the foundation of the relationship between the founder and the investor. Make sure all these procedures take place under able legal guidance.
- Co-founder agreements : You might have started your venture with your best friend and might not see the need to get into the legalities of co-founding. This is foolhardy of you as dissensions and disagreements might present themselves later on. At such times, things are bound to get messy if you don’t have a clear, compact co-founders agreement to guide the inevitable split.
Surely, you must be familiar with the story of the co-founder dispute behind your favourite social networking site Facebook. Similar was the case with Snapchat. To make sure you don’t follow suit of these corporate giants, draft your co-founder agreement with the help of a capable lawyer today. Further, the taxes and liabilities your venture would be liable to also fall under this category and can be settled only with the useful insight of a good corporate lawyer. The new exempted policies under ‘Start-up India’ can be used by start-ups for their benefit. A lawyer will help you understand better how you can avail these benefits.
Lease: Since you are running a business venture, you are bound to have an operating space. Now, if you are co-habiting in your newbie days, it’s okay, but if you decide to have a proper commercial office space, you will need to look into the legalities of this too. A clear and compact agreement on the lease is a must to avoid unnecessary hassles later.
Hiring employees : You might start off as a small team of a few members, but as your business grows you will need to hire new employees. At such times you need to make sure you have given due consideration to drafting proper employment agreements between you and your employees. Further, in order to keep your idea protected and safe, you must make sure that your employees agree to keep your company secrets safe by making them sign non-disclosure agreements (NDAs) drafted by top startup lawyers in India .
Trademarks, copyrights and IPRs : No amount of protection seems enough in the start-up world. The news is full of disputes ranging from small to fatally big between start-ups over trademark, copyright and IPR infringement. In order to make sure you don’t risk losing your venture to these petty disputes, filing trademarks, copyrights and IPRs is extremely crucial. Patents are another field you need to focus on securing. In order to make sure you don’t get into disputes like the one between Ola and Uber and OYO rooms and ZO rooms, you must have a proper Trademark , Copyright and other IPR registration. The best IPR lawyer in India will guide you through the process and make sure there are no glitches that might result in the loss of your brand later.
Negotiating contracts : Further down the line, you are sure to get into corporate relationships with other companies. These are tricky relations and need to be secured with proper contracts laying down in clear words the terms of such a relationship.
In cases of mergers and acquisitions, make sure you have a lawyer at hand drafting all the terms of the agreement as otherwise important details can be overlooked which might prove to be troublesome later.
Now that you’re convinced you need a lawyer for your start up, you might be wondering how to go about hiring one. This can be a rather taxing and dreaded process. Here are a few points to keep in mind to hire perfectly according to your legal requirements and to properly safeguard your venture:
- Pick a lawyer from a trusted source. This will ensure good long-term relations and will bind them to your start-up preventing them from leaving anytime they please.
- Do a due diligence process on them. Make sure they do not indulge in any immoral practices and are experienced enough to handle your legal matters adeptly.
- Hire lawyers according to your niche requirements. There are many types of lawyers available for hire. You must make sure you hire the one with the right skill-set and expertise in the right area.
- Price negotiation is crucial. Most lawyers charge exorbitant rates and you need to be wary of them. Most lawyers prefer to charge hourly instead of based on the quantity of work. You must make sure you negotiate these terms properly so that you don’t burn a hole in your pocket.
- Make sure the lawyer knows how to do his/her job. You can’t expect a newbie to tackle seasoned venture capitalists for you. Make sure the lawyer is one of experience and skill.
This often ignored aspect of start-up venture is actually a very important one and must be looked into with just as much caution. Hiring an experienced startup lawyer for helping and guiding you through every step of your venture will go a long way in protecting it in the long run.
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