Are you starting a new company?
One of the reasons why having a business lawyer is essential during the formation of your company has to do with the existence of mandatory legal requirements.
Starting a business can feel overwhelming. There are a lot of concerns, not only related to legal issues, but with the feasibility of the business itself.
Many things are known, others are not. A business lawyer will take care of legal issues and allow you to focus on those issues related to running the business.
To give an example, here are two legal issues that tend not to be given due importance during the formation of the business that become a problem in the future.
Shareholders/Purchase-Sale Agreement:
When the company has more than one owner, it is highly recommended to obtain a shareholders/purchase-sale agreement to agree on the relationship you will have with your partners. The big mistake on many occasions is to downplay this point. Many times, partners are friends or family members.
People tend to think that relationships will be stronger than the ups and downs of the business and leave the shareholders’ agreement aside.
The reality is that when things in the business go badly, the only thing that allows us to move forward when there are differences between partners is a prior agreement of purchase and sale, which includes the exit arrangements when the partners can no longer work together.
Trademarks
Another element that often goes unnoticed is the importance of finding out if someone else has prior rights to use your business name within your industry and geographic scope. The geographic scope has to do with the distance over which you seek your customers.
Above all, in the internet era, where sales can easily be made worldwide, when you start a business, one of the first things you should do is search for the name you want to use for your business. To make sure there will be no conflict or similar names that could not only bring you legal problems, but make you lose customers because their name or type of product or service offered would be confused with the competition, weakening input impact and differentiation.
Regarding the product differentiation, it will be at your discretion. However, the subject of your business name or any trademark that you plan to introduce to the market should be considered by a business lawyer with experience in new business and trademarks. In particular, if at any point in your business plan you contemplate the possibility of expanding internationally.
As we mentioned before, these are just two of the numerous elements to be taken into account from a legal point of view when starting a business.
If you want to consider all of the legal issues surrounding the formation of your business, contact us so that we can help you.