I admit that it has been, unknowingly, a short sabbatical from blogging for me. But blame it on the “flight of time”. It is just today that I realized that it has almost been a month since I last blogged here, when all the time I felt that I was pretty much regular with my blogging.
Let me re-start my blogging journey with a topic of utmost importance but which is very easy to overlook during the startup days. It is about building a legal shield for your company and your products. Any startup that is accelerating its way up the popularity charts is very likely to find various forms of legal speed breakers on its way up. If enough precautions have not been taken beforehand, the speed breakers can actually become major deterrents to the progress of the venture.
Never take anything for granted and be rationally paranoid !!
If you follow this simple philosophy you would be safe. This ensures that you are neither over-confident nor over-paranoid.
Before you go live with your startup a very minimum evaluation of everything from a legal perspective is essential to ensure that you are immunized from all potential legal attacks.
Some very basic steps would be as follows:
- Seek advice from a good (experienced) legal counsel. This is very important, unless you are a qualified legal professional yourself. There are various aspects, holes and vulnerabilities that only an experienced legal eye would notice. But even more important, your counsel should have expertise and experience in the specific domain. Just like you wouldn’t go to an eye-surgeon for medical advice on a bad toothache, you wouldn’t go to a criminal lawyer for advice on trademark and copyright.
- First protect your assets – get trademarks, copyrights and patents, whichever is applicable, for your product, technology, design, logo, names etc. Consult a good IP lawyer / law firm to get them done on day one itself.
- Register an appropriate domain name. If you are an internet based startup most likely this is one of the your first steps. Even otherwise this is essential because the Internet is a way of life and you would want a web presence for your business at some point of time. This would also prevent others from cyber-squatting. It is better to register / buy a name exactly matching your product / company name and for at least the common and your country specific Top Level Domains (TLDs) – .com, .net, .org, .in, .co.in etc. You should host your site in the primary TLD (.com is what most users identify better) and redirect traffic coming to the others TLDs to your primary (unless you have clearly identified different things that you want to host at different TLDs).
- Prepare the “terms and conditions”, “term of use”, “privacy policy” and other legal documents for your product and services. Ensure that your users / customers explicitly read and agree to them beforehand. The documents should be detailed enough and cover all areas of concern.
- If you are doing monetary or other forms of transactions maintain detailed records of orders, transactions, receipts etc. Ensure that the terms, conditions and clauses are clearly specified and agreed to by all parties involved in a transaction.
- Have an easy to find and comprehensive “About us” or “Contact details” section, where you provide correct information on how anyone can get in touch with you for their queries and concerns. And you or anyone from the respective departments of your company should be easily and immediately reachable at the contact medium published, especially for the legal contact.
- Take the necessary permissions and agreements with the rightful owners if you are using content, software – pretty much anything that you don’t have the rights for use. If they are indispensable but require money which you can’t afford, then either negotiate a rev-share deal or raise money to afford them. If nothing works out, it is better to refrain from using them.
- Ensure that you are shielded against personal liabilities. The very basic step here is to register your company as private limited.
- Be completely clean, regular and careful with your company books and accounts. Be 100% compliant with all Government rules and regulations. Consult a good chartered accountant and a good company secretary as and when required.
- Be extra careful with the statements that you make in press / public. You have to pick the right and unambiguous words. If required hire a PR agency to guide you.
- Never indulge in anything that is unethical or which looks legally incorrect.
- Avoid declaring or getting into any open war without adequate preparation (skill, strength and strategy).
Bottomline is – be legally correct. A legal hassle is the last thing that you want when you are starting up. It is time wasting and energy / resource draining. And if you don’t have the appropriate shields, it can be the biggest weapon that your opponents can use against you in business wars.
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