Starting and running a business is hectic, and business owners usually prefer executing and selling instead of covering legal issues that are every bit as necessary. We developed a “Business Legal Health Checklist” for business owners to better understand where they are at from a legal perspective and what they should be focusing on. It’s not legal counsel, it’s not comprehensive, and not every business needs the same details as are covered here. Therefore, we urge you to find a business lawyer as a second step to tailoring an action plan to your specific situation.
The business legal health check can cover, among other areas:
Corporate Entity
- Verify that it is in line with business purposes
- Make sure that it is duly authorized in the state where it is doing business
Equity Structure
- Verify the existence and quality of stock option agreements
- Have a proper Stock Plan in place
- Verify the presence of Cap. Table
Bylaws
- Include Directors and Officers Indemnification Agreement
- Verify that applicable Shareholders Agreements are present
- Cover Board Management Processes
Intellectual Property
- Confirm that IP matters (e.g., trademarks, design rights, software) and commercial rights are properly owned, licensed, and protected
Employment
- Verify that employment contracts bound key personnel with appropriate notice periods and non-competes
- Ensure all employees and independent contractors sign Confidential Information and Inventions Assignments Agreements.
- Corroborate that the company has an updated Employees Manual
Data Protection
- Confirm that data protection regulations, policies, and marketing strategies are all adequately aligned
- Verify that policies comply with applicable laws such as GDPR, for example
- Make sure that all terms and conditions and standard form documents reflect what the business does and are fit for the purpose
Other Areas
- Look for clauses in agreements with former and present employers that may prevent or hinder the new corporation’s business purposes.
- Ensure that the Board has approved relevant documents
- Review Contract Management and Review Process
Does your business need a legal-health check? At DuartePino, we are committed to helping local scale-ups and startups reach their full potential, so contact one of our external legal advisors. They can give you a step-by-step assessment of your business’ legal needs to ensure you are running your business under the best practices possible.
This blog was written by Ivan Ríos Mena, Esq. a member of our external team of advisors. Ivan combines his unique legal, business, and operational experience to serve emerging companies in strategic ways, made possible by his eclectic background. The former COO of the PR Science, Technology & Research Trust, and founding member of the global startup accelerator Parallel18, Ivan currently advises businesses in corporate, commercial, government incentive, and intellectual property matters related to different stages of commercialization.
DuartePino is a management advisory firm that combines in-depth customer knowledge with practical expertise in marketing communications to help clients create sustainable business growth. We can provide your organization with a fresh perspective, a proven process that invests in the outcome, and the tools for successful execution. From Fractional CMOs to business advisory services, contact us to learn how our team can help with growth strategies for your organization.
*NOTE: The content of this website has been prepared for information purposes only. It is not intended as and does not constitute, legal advice on local or federal matters.