What to Ask: Incorporation and Intellectual Property | James M. Smedley, Esq.
UpCounsel attorney James M. Smedley explains what every startup should be asking their legal team about incorporation and intellectual property3 min read
What can I do to secure my brand?
In many (if not most) industries, branding is extremely important. Normally, in any given market, there are numerous providers of the same product or service you are offering. Branding is how you stand out or otherwise differentiate yourself from the crowd. Are you the cheapest one, the greenest one, the gluten free one, the most luxurious one, the quickest one, the smartest one, or the most successful one? Whatever it is, ensure that you are not only accurate with these representations, but know how to secure your rights in your branding, not only so others do not copy you, but so you do not damage your own ability to secure those rights.
What risks are there when I bring my product/service to the market?
Infringement... Government regulation/licenses... Insurance concerns. What may seem like an innocuous action, may not be so innocuous. Ensure that you know you have all these issues in order before proceeding. And similarly, ensure that you have taken steps to protect yourself and any rights you may have in your products and services.
I know there are risks, should I do X before proceeding?
Well, in many cases this can be as much of a business question as it is a legal question. If it costs twice as much to be sure the risk is minimal or non-existent than it would be just to take the risk, then just take the risk. Many times, this can be discussed between legal and business personnel to come to the appropriate answer in each case.
Are there specific concerns for the industry I am in?
Normally this can be easily answered quickly by counsel with expertise in your field.
Is there anything I should do before I go public with a product/service?
Talk with your counsel. There are some rights and considerations that you cannot recover if you go live without taking some action first. From filing for patents, to getting certain business licenses or registrations, to ensuring your entity is formed to protect your personal assets. Some things you cannot fix after you go live.
What is the best way a small business owner can protect personal wealth and assets from business risks?
Have the business formed as one of the legal entity types that provides protection of personal assets (e.g., LLC, corp.) and ensure that that entity is run appropriately, and not as merely an extension of the business owner's wallet.
What specifically are small business owners most confused about when you first meet with them?
Requirements to engage in business and how to secure their brands, inventions and other commercial rights.
How can quality legal services help a small business grow?
Protecting your brand, protecting your business and ensuring compliance with applicable laws can ensure the security of the company and avoid expensive problems down the road.
How can quality legal services help small businesses save money?
Quality legal services can help business owners avoid common pitfalls. One thing I can say for sure, is that we have seen numerous business owners make the same mistake over and over again. An ounce of prevention is worth a pound of cure.
How can small businesses maximize the value of their legal team’s services?
Ping legal if you just don't know the answer or have a concern. It doesn't have to be an hour-long call ... Our firm, for instance, doesn't really run the clock on short email responses to simple questions. Usually if there is a bigger issue underlying the question, we can always red flag it for you.
Should business partners have the same amount of equity in a company? Why or why not?
That is completely situational. There is no one size fits all for equity. Whatever makes sense to the partners should be the correct answer in each instance.
What are the top three things a small business owner should be aware of when purchasing an existing business?
Accurately determine the value, due diligence reviewing customer lists, sale records, advertising materials, and employee contracts, Determine why the business is for sale.
Do you have any other essential legal guidance for startups that you haven't already included in this survey?
Legal is important, but don't bury yourself in it. Get advice, but do not get sucked into fear or be overly focused on risk, or you will never get off the ground.