Startup Legal FAQ

How many stages are there in a startup lifecycle?

There are different answers to this question and these stages apply to any business, not just startups. The most commonly observed stages of a business are:

  • Stage 1: company formation
  • Stage 2: company growth and development
  • Stage 3: company financing and funding
  • Stage 4: company expansion
What are some of the legal issues I should consider before forming a startup company?
  • Business structure: what legal structure should you use? The primary business structures include a partnership, corporation, trust, and a sole trader business.
  • Intellectual property: have you ensured that any IP you’ve created or will create will not belong to some other entity or other people? Is your brand name or logo capable of trademark registration? If you are outsourcing, have you got any legal document in place to make sure the IP is assigned to your company?
  • Initial share structure: what is the share ownership of each founder and who is going to do what in the company? Will there be a vesting schedule or agreement between the co-founders? Startup co-founders need to decide the ownership structure in the company and what your respective roles will be.
What options do I have for funding my startup?

Some of the most common methods of capital raising are:

I am an investor. What should I look for in a startup before investing?

During the due diligence process, you should inquire about some of the following aspects:

Do I need to worry about privacy law?

Yes, especially if your startup collects, stores and processes personal information. With the rise of ransomware, cyber attacks and privacy breaches, penalties for non-compliance of privacy laws have become more stringent not just in Australia but also around the world.

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