It’s a common misconception among start-up founders that taking steps to protect their business isn’t necessary at early stages. Unfortunately, this mindset has left a large number of businesses to be ill prepared as they lack the essential basic agreements, documents and insurances needed to avoid massive legal fees and long term business issues. 

The truth is, many of these legal implications are completely avoidable and by taking early steps to protect your business you can easily save yourself time and money in the long term.

Fishburners have teamed up with Legal Kitz and Busines Kitz to help provide you with these five crucial legal considerations to protect your business! In this post we’ll be covering:

1. Asset Protection 
2. Protection of IP 
3. Engaging Employers and Contractors

1. Asset Protection

Even though asset protection may not seem like something you need as an early phase startup, it’s really important you know all the right steps to avoid expensive legal fees later on. There are three basic principles you should consider. 

1. If you’re beginning to employ a number of new staff or contractors, it’s often best to structure your business as a company so that you can receive that higher level of protection. 
2. It’s important to set out clear contracts that consider structural and financial agreements especially if you’re in collaboration with friends, families or partners! 
3. Consult with lawyers and accountants prior to making any large purchase decisions. 

By following these three rules you can avoid the many traps people often fall into that leave them banked up with a tonne of legal fees! Be smart about your business setup, it’s never too early to start considering risks. 

2. Protection of Intellectual Property

There are many components to IP, far too many to link to just one post! Fortunately, Legal Kitz have a readily available ‘IP Checklist’ to ensure that startups like yourselves can legally protect your hard work! You can join the Fishburners Founders Hub to get your hands on it (as well as hundreds of other resources catered just to start-ups). 

If you wish to employ the work of a service provider or a contractor and are concerned about IP ownership you should always ensure that there is a clear contract involved as well as ensuring you maintain clear communication with your contractee throughout the process of collaboration. In doing this you may ensure that both parties are clear about each company’s/contractors commitments to each other. 

Similarly, when registering the company names you should be sure that you are also registering your business/trading name. When registering for a company name you are required to include the legal terms or abbreviations ‘pty’ and/or ‘ltd’. Therefore by also registering your business and trading name you not only own the business name without the legal abbreviations but also prohibit the public from registering under your name. Remember that trademarks remain under jurisdiction and if you are seeking an international registration you should seek the advice of a suitable lawyer. 

3. Engaging Employees and Contractors

Understanding the difference between an employee and a contractor is essential to ensure the security of your company. We recommend that before you employ or contract anyone new, you should use the Business Kitz checklist (via Fishburners Founders Hub) to help you determine whether or not this person should be paid as a contractor or an employee. Alternatively, you can jump online to this ATO tool but remember these are only a guide and it’s not always black-and-white.

We hope you’ve found this post a helpful starting point and if you need further advice navigating these areas we provide a number of further information and resources within Fishburners Founders Hub.

You can also book in 1-1 time with our experts in residence for pro-bono legal mentoring to help you in navigating the legal side of your business. Get started or learn more here: https://fishburners.org/pricing-page

Disclaimer: This post alone cannot be taken as legal advice. This is an educational post only and is not fully comprehensive. We highly recommend speaking with an accountant and a solicitor for further advice