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Legal Considerations for Your Company
The Necessities
EntityPeople Assets
If nothing else remember to document the following Items:
Choice of Entity
LLCCorporationS-CorporationState? Utah, Delaware
What flavor is your startup:
Choice of Entity
Raising Money? How soon? Product or Service Based
Income BracketNumber of
members/shareholders
Organizational Resources
https://secure.utah.gov/osbr-user/user/welcome.html
Of course you should consult an attorney, but consider the following:
Document Your Relationship
It’s a marriage – Do some dating! Consider Founder Vesting to
protect the company and each other = dating
Equity is expensive, so be careful to whom and how much you offer up. You don’t have to give up too
much to attract talent If you do make a promise –
document it.
Co-Founders Issues to Agree On
Contributions - cashCapitalization -
ownershipControl Protective Provisions Transfer: Prohibition,
ROFR, ‘tag along’, ‘drag along’
Vesting
Mostly handled in Articles/Operating Agreement
Leaving Your Employer
Duty of Loyalty
Your employer may own that code you’ve been working on afterhours.
Be familiar with your employment agreement (if any) before leaving.
Employer’s can be bullies – Story (KC)
Code – Own It
Your Company is a Vault Within Which to Store Your Assets
Own Employee and Contractor Work PIIA -
http://btjd.com/forms/piia.doc
Trademarks™ and Branding IP® Look before you leap; Domain
name availability does not mean trademark availability
Snatch up all domain names, twitter names, FB names, app names, etc.
Beware the cybersquatter.
Register your mark. – BBB Story; Gnome
Use TM symbol prior to registration.
Product IP
If IP is central to your business make sure you own it.
PIIA is a must for all founders, employees, and contractors. Places IP into the company vault; and Protects company through
confidentiality and possible non-solicitation/non-compete.
PIIA - http://bit.ly/WlcRZf Let others know about your rights
by using ©.
Startup Self Help/DIY
Startup Self Help
a. Blogsb. NVCA.orgc. Ycombinator and Techstarsd. Fenwick and West deal termse. Orrick.com (term sheet generator -
https://tsc.orrick.com/)f. WSGR.com (term sheet generator)g. EDGAR and scraped agreements
Startup Self Help
a. PIIA - http://bit.ly/WlcRZfb. NDA - http://bit.ly/10FjgF5c. Steve Blank Startup Tools
-http://steveblank.com/tools-and-blogs-for-entrepreneurs/
d. University Centers for Entrepreneurship
e. Free Money – Competitions
T&C and Privacy for Web Tech
Terms and Conditions Generator http://terms-of-service-generator.legalriver.com/
Privacy Policy Generator http://privacy-policy-generator.legalriver.com/
A Few Final Words of Warning
Securities Laws Raising money has serious
implications consult attorney first
Taxes Bringing on partners after
company organization can cause tax issues
Contact Information
Jared Richards – Bennett Tueller Johnson & Deere
801.438.2040 | [email protected] | WWW.BTJD.COM FORMATION
AGREEMENTS FINANCINGS
EXITS—MERGERS AND ACQUISITIONS
http://twitter.com/UTStartupLawyer
http://www.linkedin.com/in/jaredrichards
