From business structure to taxes, there are numerous legal issues to address when starting a company, many of which can bring a promising start-up to a grinding halt if the proper steps are not taken. The following four issues most frequently cause problems.
- Trademarks : Register your trademark. Simply reserving a domain name does not guarantee legal rights. Since interNIC does not deal with trademark disputes, federal trademarks take precedence over domain registrations. Unregistered trademarks do not hold up well; it is best to register the trademark federally. However, the PTO will not register a trademark if it is not distinctive enough. The U.S. government’s trademark database can be accessed at
- Deals with cofounders : Document all deals with cofounders in case disputes arise at a later date.
- Employees : Consider legal issues of hiring employees. The largest area of potential liability for an entrepreneur often is employment law. Employees have many legal rights that must not be neglected.
- Contract liability : Establish limits of liability in contracts by limiting the maximum liability to that of the contract and by excluding consequential damages.