In the current entrepreneurship boom we are experiencing nowadays, it is quite common that novice business owners — as well as those with more experience — make very frequent mistakes due to a lack of legal counseling and experience.
The top three legal mistakes entrepreneurs usually make are:
1. Not registering the company from the beginning: Lots of entrepreneurs decide to break into business individually, on his or her own, either to sound the market out or to see the outcome, or to save money from business incorporation processes.
This is a huge risk they take since they jeopardize their personal patrimony in case of legal liability.
Solution No. 1: Juridical personalities exist in all legal frameworks. Choosing the right form depends on certain factors: liability scope, available capital, tax treatment, etc.
The solution lies in getting the right advice from an expert in order to be guided to choose the adequate legal form for your situation and to eliminate or minimize the risks and drawbacks that may hinder in the future.
2. Working without contracts: Lots of entrepreneurs used to be reckless and they start working with suppliers or freelancers without contracts.
Solution No. 2: We strongly encourage to agree in writing, avoiding confusion and delimiting all duties, rights and compensations in a clear way. Drafting contract should be performed by a contract expert in order to protect your interests.
3. Not protecting your intellectual property from the beginning: This is a rather common mistake presently since lots entrepreneurs make their names known without being aware whether their name is an existing trademark, or if it is otherwise available for use. Entrepreneurs are subject to be sued in case of registered trademarks, brand names or patents.
Solution No. 3: It is recommendable to conduct due diligence in order to determine potential conflicts regarding trademarks, brand names or patents already registered. Before promoting a trademark, brand name or patent you should appropriately register it either locally or internationally depending on the market coverage or expansion.