A Brief Description of the Corporate Law for Start-ups
After reading the below feel free to contact us to discuss your corporate law needs.
Corporate lawyers are trained and experienced specialists who advise enterprises. The experts must consistently stay abreast of the latest critical legal developments that may affect your enterprise. They may work for large firms or practice independently. Some corporate lawyers and firms provide advice regarding a wide range of matters, while others focus on specific areas. The areas of practice for independent attorneys and firms vary considerably. For example, a counselor or firm might focus on complex transactions, while another specializes solely in litigation and a third attorney or group may practice a combination of the two. Despite the practice area or size, corporate lawyers work in a rapidly changing environment.
Corporate lawyers provide invaluable services, delivering insights and information that go beyond technical compliance with the law. During their work, lawyers learn a vast amount of information that may prove critical to your venture. They can also provide input as to how varying developments emerging in other overlapping legal specialties might present concerns.
Seek the Counsel of an Attorney When Raising Capital
When raising capital for your start-up, it’s wise to seek the counsel of an attorney or firm that specializes in financing. Three common funding resources in the current market are crowdfunding, investment capital and venture capital.
Crowdfunding is a relatively new fundraising instrument available for your launch initiative. Taking advantage of this resource encompasses raising small sums of capital from a large pool of investors. In return for crowdfunding, some start-ups offer early access to products or services, while others offer corporate equity. Crowdfunding contracts can prove complex, especially when corporate equity is involved.
You may opt to seek investment capital for your start-up. A corporate lawyer will protect your interests and help you understand the intricacies of relinquishing partial control of your venture. For instance, savvy investors may negotiate for privileges that parallel those of majority shareholders. This kind of concession might allow investors to exercise more authority than the value of their investment. When it’s time to forge the terms of your investor contracts, you can find an experienced corporate lawyer at Curry Law that will make sure that your investment agreements serve the best interests of your enterprise.
Raising venture capital is another way to acquire funds for your start-up. When using this method, it’s vital that you secure the services of experienced corporate counsel. At this stage of operations, there’s very little for investors to assess – other than executive profiles, your business concept and the tentative market for your product or service. With the small amount of information available, you’ll want to have all your documentation in order. Documents such as your marketing materials, shareholders’ agreement and asset portfolio may serve as deciding factors for early-stage investors.
Manage Internal and External Relationships
It is important that your organization conforms to the corporate structure that defines your enterprise. However, choosing a corporate structure is not always a straightforward process. There are many policies and procedures that shape your corporation, such as:
- Change initiatives
- Information processes
- Performance evaluations
The structure that you choose must make it easy for third parties to do business with your organization. This may include, in special circumstances, setting up provisions so that external business partners can document transactions as if your corporation is a sole proprietor.
When establishing your start-up, it’s critical that you properly manage the business relationships that you have with internal stakeholders. Even large, established corporations sometimes have trouble in this area. Despite contractual agreements, the relationship that you have with internal stakeholders can cause government agencies to view your working arrangement contrary to what you’ve documented. For instance, many enterprises have experienced trouble with the Internal Revenue Service regarding the classification of workers as independent contractors versus employees.
You may launch a start-up with other entrepreneurs by forming a joint venture. When doing so, it’s imperative that you seek corporate counsel to ensure that you don’t inadvertently form a partnership. If this happens, you could accidentally give yourself and other stakeholders the authority to legally bind each other and expose all stakeholders to liability for each other’s acts. Making this mistake is easier than you might think, as there are several common elements between partnership and joint venture agreements.
At some point, you will need legal assistance to launch your start-up. Your lawyer will advise you on pivotal matters and finalize highly important legal documents. The recommendations that you receive are only as good as the skill and experience of your lawyer or firm and how closely you comply with the provided counsel.
If this is your first start-up, choosing the right representation may prove intimidating. It’s a sensitive process where you must put your dreams and your investment in time at the mercy of another individual. However, by having a solid grasp of your needs and expectations, you can produce a positive outcome for both you and your new representative.
Corporate law is a fast-paced, evolving environment. New innovations, financial practices and legislation have transformed the marketplace, and changes continue to emerge as business trends, industry leaders and lawmakers make corrections that align with current demands. Today’s corporate counsel is meeting this deluge of innovation by implementing technologies that aid them in keeping up with the rapid tide of change, with some firms revising or adding entire business units to adapt to the modern marketplace.
In a world that constantly offers do-it-yourself service at a discount, it’s important to remember that you get what you pay for.