A start up company, or “startup company,” is a company that is coming into existence with little to no amounts of operating history in the past. These types of companies generally seek to create new markets or to build upon newly opened channels of commerce. They are typically associated with new inventions and technology, particularly in the computer and internet sectors.
Due to the “newness” of start up business operations, they can be associated with various risks and concerns. For instance, laws may not always have complete coverage of extremely new products, inventions, medicines, or technology. Also, start up companies may experience high growth in the beginning, but may be subject to limited markets as well.
Although they may start from “scratch”, start up companies do not come out of nowhere. They require careful planning and much foresight in order for the company to be successful. Part of the challenge and excitement with start up companies is finding the right “niche” in the market. This requires an understanding both of the business field of choice, as well as the laws that apply.
Some aspects to consider when starting up a company may include:
- Planning and expenditures
- Tax laws
- Startup business regulation– laws may be different in each state, and sometimes even in different areas of town (due to zoning, etc.)
- What type of business form to use (i.e., LLC, partnership, etc.)
- Contract rights and limitations
Generally speaking, it may be difficult to legally engage a start up company before they become officially recognized under state business laws. This means that liability for any violations by an organization may change once they file for incorporation with in the state. This is especially true for business forms such as limited liability companies.
If you have a legal issue with a start up company, you may need to obtain legal advice for your concerns. Be sure to compile any documents or evidence in support of your claim, which can be used in future proceedings.
Start up companies are associated with very specific legal requirements and issues. If you need any assistance at all with a startup company, you may wish to hire a qualified business lawyer in your area. Your attorney can advise you on how to plan and review for your business’ success. Also, if you have any legal disputes or conflicts, your attorney can help you file a lawsuit for damages.