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Legal Issues Every Startup Must Address

The legal code in the US has become notorious for its length and complexity. No single human being could possibly read the whole text, and yet everyone is expected to abide by it.

Most of the laws on the books are just common sense. Don’t steal. Don’t kill. But it’s when the laws refer to business that they get truly out of control.

In a sense, it’s a minefield, especially for small businesses looking to branch out. New sectors may come with new regulation.



Legal issues in today’s America have to be woven into the business plan. A happy-go-lucky approach will not work in the long term. So here are some tips that can help give your legal strategy a boost.

Keep Legal Processes Moving

Sometimes it can take a long time for your business to gain permission to do something. There’s a time lag between when you want to offer a service and when you’re actually compliant.

The problem for small businesses is that the authorities don’t care about your cash flow. And they don’t care that delays could seriously harm your business.

With this in mind then, the best strategy is to run your business in parallel. Focus on what you are allowed to do right now, and at the same time keep any compliance processes moving forward.

Perhaps you already have a permit to operate in one State but are held back from working in the next because that has a different permit system. Build your operation in the first State while starting the process of getting a permit in the next.

Budget for Legal

Many businesses underestimate their legal costs when they produce their forecasts. Legal issues tend to be more complex. And legal issues tend to bounce back and forth. Conservative budgeting needs a margin of safety built in to avoid cash flow problems in the future.

In addition to legal fees, you may also have to pay for other fees imposed by the government. Depending on your business, you might have to pay for licenses and bonds. There are sites like, for instance, cataloguing the dangers. But it’s up to you to get your legal affairs in order.

Choose the Right Attorney

There are few generalists in law who are well-equipped to deal with all cases. Therefore, choosing a specialist is important. Having the right specialist can mean the difference between gaining compliance and not.

If you’re a tech startup, you’ll likely want to work with an attorney who has experience in filing patents. They’ll know the ins and outs of the patent filing system. And they’ll be able to advise you on the type of license agreements you can make.

Avoid Breaking the Law

It’s worth working with a legal adviser from the start. If your firm does break one of the thousands of laws on the books, your business will be at risk.

If you are convicted of an offense, you could be fined. Small businesses were fined millions of dollars last year for non-compliance. Worse than that, customers may abandon your business because of your damaged reputation. Having the right legal adviser early on is paramount.

About Subodh Tandon

Subodh is a full time marketing consultant and a skilled blogger. His area of interest belongs to marketing and finance related news and love to share all of those topics over the internet. You can catch him directly through this blog.