Starting A Business

Starting a Business? Protect Yourself!

So, you’ve decided to start your own business, congratulations!  You’re on your way to a fantastic experience as you build a successful enterprise.  Here are a few key tips, documents, and warnings from commercial lawyers and someone who started their own $10 million dollar software company.

  • Protect Yourself. Business is a risky proposition, and starting your own enterprise can put you at tremendous financial risk.  Fortunately, the law provides a way to protect your hard work and safeguard your personal property and other assets should anything go dramatically wrong in your business.  The entity I’m describing is a corporation, or limited liability company.  Both of these constructs allow you to run a business but shield yourself from liability.  It’s important to do several key things:
  • Corporate ‘formalities’: You can’t start a corporation and then pretend it doesn’t exist, you have to run your business and maintain what commercial lawyers call “corporate formalities” – meaning you have to hold regular managers or shareholder’s meetings, and in all ways act as if it’s the company doing business, not you.
Shareholder Agreements

Why Are Shareholder Agreements Important?

Shareholder agreements are a vital part of a company’s structure. They outline the agreement between the shareholders – the people who invest their money in a company – and the company directors – the people who decide how to spend this money.

While shareholder agreements can be complex and somewhat difficult to set up, it is important to realise that they are extremely important. They need to be drafted with the help of high-quality commercial lawyers to make sure that they are error free and that they encompass the necessary information, and they need to be treated like the important legal document that they are.

Some of the main reasons why shareholder agreements are important include: