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    Legal Protection for Startups -Why It Matters So Much

    Every year roughly 500 startups are created, which suggests that Australia is one of the fastest-growing startup ecosystems in the world. Every day, people are trying to make their dreams of being entrepreneurs come true.  

    However, creating a successful startup is not all sunshine and roses. It’s stressful and it takes patience and perseverance. Some startups take off and some are doomed from the very beginning.  

    One of the things that makes a startup fail is the lack of legal protection right from the very start of your business endeavor. Legal protection for new startups is crucial and we are going to break down to you the real importance of it.

    So, without further ado, let’s see why legal protection for startups matters so much.

    Establishing the right business structure

    One of the first steps on your business journey will be establishing the right business structure for your startup. You can choose between setting up an LLC, a corporation, a joint venture, LLP, or something similar.  

    Each of these business models runs differently and they all have their advantages and disadvantages. Before settling for any of them, you’ll need to do thorough research and it’d be advisable to consult with a trustworthy lawyer, as well. Seasoned solicitors from Sydney may give you legal assistance in cases like this.

    Apart from helping you settle on a certain business model, solicitors can also help you understand any potential legal problems that you may encounter in your future with that particular business model.  

    Agreements and clear terms with your co-founders, shareholders, partners

    To avoid running into any potential conflicts that can seriously affect the future success of your business, you need to make your terms clear by signing written agreements with your co-founders, shareholders, and even your vendors and suppliers.

    Unfortunately, when it comes to business and money, there is no shortage of conflicts. The reasons why startup conflicts occur are many but probably some of the most frequent ones happen due to the poorly set rules about roles in a company, and about who gets what.

    So, whether your co-founders and shareholders are complete strangers or friends, it’s important that you begin your startup in a legally binding way — by signing contracts. These written papers are what will ultimately keep your company afloat, and they will keep you protected against lawsuits and other liabilities.

    Know and understand your tax obligations

    If your aim to make your startup completely legal, you’ll need to pay your taxes. The key to complying with your legal obligations is to pay taxes correctly and on time.  

    For every country or state, tax regulations vary. They are also different for different business types and structures. So, taxes are something you can never leave for later if you want to make your business legit.

    Thankfully, a good solicitor can help your get familiar with your tax obligations.  

    Your intellectual property should be protected

    As a new startup owner, you need to protect your ideas, your product, or services — meaning you need to protect your intellectual property. If you fail to do this on time, you risk your ideas, products, or services being stolen.  

    To avoid theft problems, you’ll need to register your intellectual property. Depending on the type of business you’re planning to run, legal intellectual property elements include different things from copyrights, patents to trademarks and trade secrets. Once again, this is something that a solicitor can help you out with.

    Managing employee relationships

    Just like you need contracts for co-founders and shareholders, you’ll also need to sign contracts with your employees. With these written agreements you will easily manage employee relationships and avoid potential legal problems such as lawsuits.

    You can never predict what will happen in a workplace, from workplace injuries to discrimination and other problems. It’s better to safeguard from any potential issues right in the beginning.  

    Your lawyer can help you create contracts that will ensure that your business is safe and that no one can abuse their position or a certain situation.

    Understand lawsuits    

    Still, with everything you do to protect yourself from legal problems of any kind, you must be aware of all the lawsuits that you may come across.

    Lawsuits come in all kinds of shapes and forms from copyright infringements, breaches of contract to all kinds of false claims. You need to understand all of these lawsuits because you never know what may arise.

    Your lawyer can give you a hand when it comes to understanding all the lawsuits that may or may not happen.

    Don’t forget about general liability insurance

    This is something that your lawyer will probably advise you to get. General liability insurance, also known as business liability insurance, is the kind of insurance that protects you and your company from false injury claims or generic claims of wrongdoing.

    It’s really important that you acquire this kind of insurance because it can help you out a lot in many situations. This insurance protects your business and covers the costs for property damage against your business. If someone gets injured in your store or the workplace, this insurance covers the medical expenses and so on.

    General liability insurance is not compulsory for businesses in Australia, however, it’s a good idea to have it, because you never know what may happen.



    Here you have it, all the reasons why legal protection for startups matters so much. If you’re planning to operate within the law, having legal protection is highly important.  


    Having someone experienced and trustworthy who can help you navigate the legal waters is crucial for the success of your startup. So, don’t play around, be smart and legally protect your startup right from the get-go.


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