Suppose you are thinking about starting a new business venture and have already researched your product/services, reached out to investors, and are in the process of or have already created a business plan. In that case, you are likely going to set the ball rolling any time soon. However, before you jump into action, there are a few legalities that you might need to consider. In addition to the regular business plans, forecasting and projection sheets, year-end goals, and investment cycles, you need to do a lot of legal paperwork.
From pre-planning your business goals to setting up your periodic milestones and drafting all the legal documents, there’s a lot that you need to do. It is important to review everything from both an entrepreneurial and a legal perspective to ensure that your business starts on the right track. Here are a few essential things that must be a part of your legal checklist for new businesses.
Mission Statement is Crucial for Your Business Plans & Legal Documents: It is essential to have a clear understanding of your business and where you see it a few years ahead. To have this clarity, creating a mission statement is pivotal. While the mission statement is not typically set in stone and can evolve or be changed as your business grows, it plays a vital role in the legalities of your company. Your mission statement directs the legal decisions, including the type of company you will form, the treatment of taxes, employee types, benefits, and company vendor relationships. Your mission statement should be easy to understand and define the scope of work your company will do.
Understand Your Targets for the First 5 Years & Beyond: Setting targets for the first year or more is an excellent way to dive in deep but having a long-term plan is equally important to start a business in any industry. You must know your end goal with the company. While a mission statement focuses more on your personal choices and approach towards your brand, your end goals and target define the respective milestones in numbers. Your mission statement also clarifies whether you would need an investor for expansion plans, are planning any acquisitions or mergers, want to list your company on a stock exchange, and other binding terms that set the course of your company.
Finalizing and Defining the Management & Hierarchy of Your Company: While you might think who does what in your business is not a primary legal concern, it plays a significant part in paving your legal decisions. Apart from the owner and employees, you must also clearly define the roles of other entities in your business, including any potential co-owners, senior management, third-party vendors, service providers, and investors. The most important of these are the partners, as your ideas need to align with those that your business partner has to reach a collective end goal. You also need to consider the amount of control you are willing to share.
Proximity, Location & Clientele Are Important: Like the What, Who, and Why as stated in the above 3 points, a Where is equally essential for any business. Your business’s location refers to more than your business’s physical address but also to the areas you want to work in, the locality of your customers, and the place where you register your business. Setting up an office and managing the influx of customers is crucial if you have a retail store, a service-providing company, or any other business category.
Copyrights, Trademarks & Patents: This is the most crucial part and is one of the essential things on the legal checklist. It is vital that you not only protect your brand but any other products or entities associated with it. Start by registering your brand name. Following that, if you are selling any exclusive products, you better get patent rights, and if you are a service provider, you should acquire the copyrights. Discuss this with the lawyer in detail to avoid inconveniences at a later stage in your business.
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