Corporate Law for Startups

Tuesday, 18 February 2020 by

If you spend the time and expense to incorporate your small business, then you should make sure you observe the corporate formalities. There are many reasons for observing corporate formalities. The most important reason is that if you don’t, you are leaving yourself open to someone trying to “pierce the corporate veil”—getting at your personal assets for the liabilities of the corporation. This blog describes the corporate formalities for a small business.

This article is about some of the traps that lie in wait for unwary founders. Remember that any startup has numerous issues to deal with starting on day one of the formation of the new business. A new business owner who fails to be ready on day one proceeds at his or her own peril. Startup legal problems can take numerous forms and this article discusses some of the major issues such as failing to assign the IP to the new company, failing to reduce investor or partner agreements to writing, agreeing to a “standard” agreement, failing to observe corporate formalities, and failing to take into account that partners may die, get divorced or file for bankruptcy.

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