Kevin Vela

Vela | Wood

4 min read

Brand protection is more necessary today than it's ever been. Small business attorney, Kevin Vela, gives law advice for startups and small businesses:

Wanting to start a business is the new black, let's be honest. Everyone has an idea. Turn over any laptop at a coworking space, and you'll find someone who is the CEO/founder/Chief Fun Guy of Zaggle.io, a new B2B2C2B startup.

In reality, though, running a startup is all about execution. Anyone can wake up with an idea, but putting that idea into motion takes work. Let us at VW help you get the legal side going so that you can focus on executing your idea.

Here are a three easy things you can do to protect your business and make sure that you have a solid legal foundation underneath it:

Incorporate.

You'll want to formally organize your business with the Texas Secretary of State (or in some instances, Delaware or another state). The most common entity structures are a Corporation or LLC, although other structures make sense in limited instances.

Corporations and LLCs each have their own pros and cons, so make sure you research the differences beforehand, and consult with an attorney or CPA prior to making a decision. Note that you can always convert from one entity type to another (though sometimes with tax or financial consequences), so it's not an irreversible decision.

That said, you would be wise to (a) spend some time on this before incorporating, and (b) incorporate before your startup gets too far down the road. At what point should you incorporate? You don’t have to do it immediately. It's okay to work out the business plan, maybe grab a domain name, and sketch out a few ideas with your co-founders without incorporating. Though I would strongly advise that you incorporate before you enter into agreements with any third parties or accept friends-and-family investments.

Protect your identifying marks.

Simply put, trademarks include logos, slogans, and trade names. They can also be called "service marks." There is a simple, common law way of protecting your trademarks - simply put a "TM" or "SM" (for service mark) next to the mark you want to protect. This is a good start, like wearing a hat at the beach, but it still leaves you a good chance of getting burned. To lather up in sunscreen, register your trademark with the USPTO. Talk to your attorney about this.

Get things in writing.

This one is the easiest to do, however it’s also the most commonly ignored. Getting things in writing starts with co-founder agreements. Even if you haven't yet incorporated your startup, put down each person’s obligations, duties, and rights on paper, and then have both of you sign it. DO NOT HIRE A CONTRACTOR without an agreement in writing. And check his or her references. The most common issues I see with startups are co-founder issues (which could be avoided if every party clearly understood its role) and bad third-party contracts, which really means having no written contract.

As an entrepreneur, you’ve got plenty on your plate. Legal considerations are usually the least of your concerns. Nonetheless, follow the steps above early on and you will guide your company on the right track from a legal perspective.

written by Kevin Vela

Kevin Vela is a founding partner at Vela | Wood P.C. He focuses his practice in the areas of startups, corporate law, capital raises, investment funds, and real estate investment activities.

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