What are the Legal challenges for a starting business?
As a startup founder setting up a new company or trying to raise funds, you will be aware that there are **numerous legal documents¨¨ that must be filled out and signed to formalize and legalize the various processes. As if it wasn’t difficult enough!
Here, we have gathered a collection of the legal templates you will need to streamline these processes, speeding up time for you and your investors, and saving some money in costly legal fees. You will still need to consult a lawyer for solid advice, but these templates should speed things up a bit. As well as this they should provide a beginner entrepreneur with a deeper understanding of the key terms and phrases used in the startup legal world. Learn from those that have gone before and made those all too common mistakes. Forbes have actually listed 10 Big Legal Mistakes made by startups. We’re here to make sure you avoid them:
- Ambiguity regarding the deals being made between co-founders
->To avoid future disputes, all co-founders must be crystal clear on
-who gets what percentage of the business?
- -% ownership subject to vesting?
- -can a co-founder buy another founder’s shares if one leaves?
- -co-founders time commitments?
- -founders salaries?
- -founder contributions?
- -selling the business?
- -if a founder isn’t living up to expectations?
- -overall vision?
Not starting the business as an LLC or Corporation
Not having a standard form contract that favors your company
Forgetting about securities laws when it comes to issuing stocks to family and friends
Leaving out employment documentation
Not giving enough thought to IP Protection
- -Confidentiality Agreements
- Forgetting to study carefully important tax issues
- Picking a name for the company that has issues surrounding trademarks, domains etc
- Not having solid legal counsel
If you have thought of all of these- great! You’re more clued-in than most. If not, take advantage of Eloquens to read up and grab documents you might need to ensure that your startup will be legally sound.
If you’d like to know more on Business Law, have a look at these links:
- Advice for founders on how to divide equity between co-founders.17 remove_red_eyeLike!
Term Sheet Series A TemplateGuidance for founders negotiating Series A funding.15 remove_red_eyeLike!
Series A Preferred Stock Purchase Agreement Template - NVCA ModelBuild your own Stock Purchase Agreement for your deal with this sample document built by the NVCA.11 remove_red_eyeLike!
VC Venture Capital Term Sheet Template - NVCA ModelA Series A Preferred Stock VC Term Sheet Template13 remove_red_eyeLike!
Safe (Simple Agreement for Future Equity) Financing DocumentsDocuments for Simple Agreement for Future Equity Financing for replacement of Convertible Notes.New!Like!
Sales Agreement TemplateA Sales template to start you out- tailored for SaaS businesses.New!Like!
KISS Debt VersionKISS stands for Keep It Simple Security: Debt Version legal document template.New!Like!
KISS Equity VersionKISS: Keep it Simple Security; Downloadable Equity Version Template.New!Like!
Kiss SummaryKISS: Keep it simple security. Summary of key terms to be read in conjunction with KISS Debt & Equity Versions.New!Like!
Stock Investment AgreementA Stock Purchase Agreement Document TemplateNew!Like!
Certificate of Incorporation TemplateA Certificate of Incorporation sample for the creation of an organization or company.New!Like!
Term Sheet TemplateTerm Sheet made by Series Seed outlining basic terms and conditions of an investment.New!Like!
Co-Founder Equity Split TemplateSpreadsheet containing 5 calculators and a box that takes the average of everything among all 5.New!Like!freeby Al Bsharah
Explanatory Brochure on the Anatomy of a Term SheetExplanatory brochure designed to help entrepreneurs understand and evaluate early-stage equity financing term sheets.New!Like!
Term Sheet TemplateA Simple Term Sheet Template by Gunderson Dettmer Law FirmNew!Like!
How to Fully Understand a VC Term SheetFull descriptions of each aspect that makes up a VC term sheet.New!Like!freeby Brad Feld
Technical Briefing: Preferred Shares: equity or a liability?To help you understand the implications of accounting standards on the classification of preferred shares.New!Like!
Subscription & Shareholders Agreement TemplateTemplate designed for Subscription and Shareholders Agreement. (63 pages) Opinion included.New!Like!
Term Sheet TemplateTerm Sheet Template for a Series A RoundNew!Like!
Model Articles of AssociationModel Articles of Association Template (62 pages)New!Like!
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