There is a great post on Venturebeat.com about 6 common legal mistakes startups make.  Some of these have been covered elsewhere on this blog – some not.  Here is the cliff notes version- check out the post itself for more details:

• IP Ownership – make sure it can be transferred to the startup.
• Choice of Entity – choose carefully.  They recommend a corporation instead of an LLC.  I disagree on a certain level, as I have stated before on this blog and my Indiana Law Practice Blog.
• Place of Incorporation – they say Delaware.  Again, I disagree to an extent (see this post).
• Vesting Restrictions – make sure founders stock vest over time, otherwise you run the risk of a founder leaving early on and keeping all of his /her stock.
• Securities Law Compliance – beware of not complying when issuing any securities to anyone, no matter who they are.
• Legalzoom – avoid like the plague.  Hire an attorney!

About the Author - Brian Powers

Brian Powers is an attorney, entrepreneur and the owner/founder of IndianaStartup.com. His legal practice focuses on advising entrepreneurs, start-ups, and small business. He can be contacted at (317) 426-0529. He also never wears ties, despite what you see in this profile picture.

Website - Twitter - Facebook - More Posts

Related posts:

1. Should Founders Assign IP to Their Tech Startups?
2. Thinking about incorporating your business? Look no further than your home state.
3. What state should your business incoporate in?
4. When should you incorporate / organize your start-up business?
5. When is the Right Time to Incorporate Your Business?