Why Startups Need Legal Support

Why Startups Need Legal Support

Your idea is great, you have done some research, and you are eager to start selling your product. Suddenly, you are inundated with disappointed customers, then you start getting serious complaints, and finally, you are slapped with a fine because what you have said your product does - and what it really does aren’t the same.

That is just one scenario, but there are hundreds that startups run into every day.

Here are just a couple of the reasons that, as a startup, you should be looking to have some level of legal support.


You don’t know what you don’t know, but luckily, there will be a lawyer in your specific niche who will know everything you need to know and then some. It is their job to be aware of every single risk that you could face as a startup and then a small, thriving business. Not only can they advise you in the run-up to the official launch, but they can prepare everything you need in terms of paperwork, too.

The lawyer you choose should be in your niche, if possible, rather than general, for example, a lawyer that specializes in hair salons, a cannabis law firm, or a content creation legal expert. Choosing a legal representative that has experience in your industry will mean they are very well-versed in spotting risks and letting you know about them.

Company Type

While there is plenty of information available about how you should be setting up your business and what structure to use - you wouldn’t be the first person to be confused or even put off by it. There are some big differences between a sole business, a private limited business, a public limited company, and an LLP. And if you just aren’t sure which is for you, how to set it up, or what the legal responsibilities you have are, then legal support is an absolute must.

Your company type can be changed at a later date, but if you get it right from the start, you won’t have issues down the line.


When we think of lawyers, we either think of defending or attacking - but in the case of business, there is another area where they are invaluable. Protection of your intellectual property is something that you will need legal support for.

Your company's assets are essential for business, and the IP is at risk until it isn’t. And that ‘isn’t’ only comes when the right legal process has happened. There is a lot of technical language used when it comes to intellectual property - and while you may understand most of it, the devil is always in the details.

Anything missed, unsigned, unread, or not sent where it needs to be, and your IP could be up for grabs. Make the process simple from the start, and every time there is something that counts as IP, get it covered.


It is the early days, and you have been doing business with verbal agreements, handshakes, and coffee meetings. You get the work done or deliver the product, they pay, and everything is fine. But then a bigger client comes along, you approach it in the same way. After you have spent time and effort on the work - the client refuses to pay. Since there is no contract, and you didn’t take a deposit, you have very little in the way of possible fixes.

This is a nightmare situation that is surprisingly common with new businesses and freelancers - both of which can be taken advantage of without the right protection in place. And in this case, a contract would have been insurance.

That isn’t the only area where contracts matter, though. Imagine your business is thriving, and you are in a position to take on staff, and again, handshakes and hiring happen without a contract.

One day, they don’t show up, don’t get in contact, and you never see them again. But what they did take was all of their ideas and secrets about your business and go elsewhere - a nightmare that a contract would’ve prevented - or at the very least given you some room for recourse.

It isn’t just the contract that you give to people that matter; the more you grow, the more contracts you’ll have to look at. Suppliers, finance, rentals, warehousing - and anything to do with your business will pretty much come with a contract. Don’t risk everything on something that is worth giving to a legal professional.


You should have an accountant to help with anything you need when it comes to finances and your accounts - and, very specifically, your taxes. However, a legal professional will make sure that you are adhering to any and all tax laws that apply to you. This comes under the risk assessment, but in action, it can make a big difference. Your legal professional and accountant can work together to make sure that you maximize your credits, save where possible, and that you are fully compliant.

Your legal professional support will end up being able to give you advice that can make the future of your company more prosperous. While they are always on call if things get choppy or you are in hot water, having a strong relationship with a legal professional who understands your business fully - and what you are trying to achieve can make a huge difference to how successful you are likely to be.

Many start-ups will skip out on getting legal advice, and while some are fine, others end up in a lot of trouble. The best defense is a strong offense and the strong offense in the business is a solid legal setup and a legal team that you can work with. In the end, though, good legal support is just one of the many components of having a successful start-up; here are some other tips for helping: 6 Financing Strategies When Starting A New Business

Related Stories

No stories found.
Resident Magazine