Sjoberg & Tebelius, P.A.
Serving Minnesota & Western Wisconsin

Three Legal Issues Startup Founders Should Make a Priority

Roses.jpgCompanies of all sizes have crucial decisions to make, including but not limited to raising funds, creating brand awareness, and marketing the product or service. As a result, sometimes legal issues are put off, or even totally lost in the shuffle, making the company's long-term performance less than rosy.

However, there are three legal issues that founders should make a priority:

Business structure

One of the most important decisions to make up front is choosing the right legal structure for the business. Many tech startups wish to register as a traditional corporation, or "C-corp." Corporations shield owners from personal liability, and many investors prefer investing in this type of structure.

However, corporations face what is known as "double taxation." The corporation is taxed as a separate entity, and owners also pay taxes on their returns. This can put a strain on limited funds in the early days of a business.

To avoid double taxation, a startup in its early stages can register as an LLC. Although LLCs often have a limited lifespan, they can convert to corporations later.

Intellectual property

Every business, especially tech startups, hold some form of intellectual property. Examples include:

  • Logos
  • Software
  • Processes
  • Inventions
  • Word trademarks

Startup owners are often tempted to delay investing in intellectual property protection to reduce costs. However, some types of intellectual property lose their protection if owners wait too long.


Contracts perform an essential function for startups. They can outline the employment relationship, stock options, intellectual property assignment, liability, and more. Agreements between co-owners are especially important, as they address risk and ownership issues.

Tackling each of these issues early on can save startup founders from significant legal headaches down the road. For many businesses, consulting with a business planning attorney helps provide a strong foundation for success.

No Comments

Leave a comment
Comment Information
Client Testimonials

Client Testimonials

  1. “Thank you for providing personalized professional services to us during a time of grief and loss when family relationships were not the best. With an attorney on board to help manage legal matters, everyone had confidence that the best was being done. ”

    Read More…
  2. “Our estate plan was handled well. We never felt rushed and all details were fully explained. Sam is very professional, easy to talk to and experienced in all aspects of estate planning. He gave examples and explored alternatives for us to consider. Well done and thanks.”

    Read More…
  3. “I was given the name of the law firm by a family friend after helplessly pilfering through endless names on websites. I am grateful I called. I was connected with Dave Meier immediately and from the go, was treated with dignity, care and respect. Every visit to the firm was pleasant and professional. ”

    Read More…
  4. “We were highly impressed upon the level and capability of Sjoberg & Tebelius. They gently showed us that there was much more to achieving the Will in the correct format that will protect our children than the quick attempts we had made on our own. Great people to work with - achieving our desired results!”

    Read More…

Over 30-years of experience Serving Minnesota & Western Wisconsin

Sjoberg & Tebelius, P.A.

2145 Woodlane Drive
Suite 101
Woodbury, MN 55125

Toll Free: 888-892-7044
Phone: 651-315-8856
Fax: 651-738-0020
Map & Directions