It may have be a lightbulb moment or you’ve been thoughtfully pondering an idea for some time – regardless, before moving forward there are numerous legal considerations:
What information is confidential?
Contact counsel to assist you in identifying what information you can share and what to keep quiet. Until you’ve entered into a confidentiality and non-disclosure agreement a simple conversation over cocktails can breach your own confidentiality and destroy your idea.
Do I need a business plan?
Before you embark on a costly and life-changing entrepreneurial adventure it needs to be thought through. A business plan can assist you in this process. It is also necessary to obtain financing.
Where does money come from?
Initial capitalization can be complex. Businesses should bootstrap for as long as feasible. Being able to self-fund is best, but not always possible. Figure out how much you need, when you’ll need it and exactly what for. Funds from private lenders and banks may be the right approach or you may look for equity investors. There are securities guidelines that regulate investments even from friends and families. Don’t take money and handout equity without consulting with counsel.
What initial documents do I need?
It depends. Each business type has different needs. Do not start signing documents before they’ve been reviewed. Also don’t forget that verbal commitments can be interpreted as contracts. Don’t promise a friend that they can be a partner. In absence of a legal structure and agreement that says otherwise, a court may permit a verbal agreement to hold as having formed a general partnership.
When should I contact an attorney?
Immediately. An initial consultation can provide you guidance regarding preliminary operations to ensure you avoid common pitfalls. Counsel can also assist you in determining their role throughout the process.