4 Big Mistakes that StartUps make


One of the things often ignored by startups is the need to have a Founder’s Agreement. A Founders Agreement is what governs the relationships between the founders of a startup. It defines the roles and responsibilities of each of the founder members. It establishes the organizational structure and hierarchy and leaves absolutely nothing to chance.  It can go on to specify the type of contribution each member is to make in times of capital, skill, expertise and time. It is particularly handy when it comes to resolving disputes between the founding members of the startup should any arise.

Another thing that Startups take little time to consider is the issue of forming the right engine to carry their idea. Different entities carry different advantages and disadvantages to them. Depending on the aim of the startup, one startup could greatly benefit from the tax reprieves that come with forming a Limited Liability Partnership while another could benefit from the unlimited nature of a Public Company. It is important to take time and evaluate what entity best fits your startup. It may be necessary to seek competent legal advice on this.

Founding a startup is a sensitive endeavour, some startups are based on novel ideas and a malicious employee can steal an idea and run away with it or also find a way of stealing clientele. This is why a startup needs to start thinking of Non-Disclosure Agreements and Non – Compete Clauses as soon as possible for all the persons involved in the Start-Up. In addition to this, it may be important to have very well defined Confidentiality Clauses wrapped into comprehensive Employment Contracts.   

It is also very important for founders of a Startup to protect the intellectual property rights that arise from their startup. Be it copywriting source codes, patenting a device, registering a discovery as an industrial design, startups need to find active ways of protecting the intellectual property rights that attach to their startups to avoid the risk of them being duplicated by a malicious person elsewhere. A registered intellectual property right means that your ownership of your brilliant idea or device is legally recognized.

Published by masibolaw

We help ambitious entrepreneurs to overcome legal and regulatory obstacles while growing their businesses.

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