Consulting a lawyer can save tech entrepreneurs from big problems, and major financial headaches, later down the road.
But retaining a lawyer can seem expensive and time-intensive for cash-strapped startups.
Enter LegalSpark, a new tech company that’s changing how Atlanta entrepreneurs get legal advice. Think of it like an Uber-style concept, except one of 50+ Georgia-based lawyers calls you – in mere minutes. You can ask whatever you’d like, from wherever you are, for a flat fee.
So what should Atlanta’s tech entrepreneurs ask lawyers?
QUESTION: WHAT TYPE OF FORMAL ENTITY IS BEST FOR MY BUSINESS?
Startups often learn after launch that, if they had chosen another entity type (LLC, Corporation, S-Corp., etc.), they could’ve saved substantial money on taxes or limited their liabilities. It’s never too late to discover your options for your company’s structure. Talk with a business lawyer to determine which structure is best for your specific business.
QUESTION: HOW DO I PROTECT MY BUSINESS IDEA WHEN DISCUSSING PARTNERSHIPS?
Want to feel secure when discussing your business with a potential partner? You’ll want to have non-disclosure agreements (NDA) in place to protect confidential information about your business. NDAs can protect your intellectual property assets, prohibit a party from revealing your business secrets, and protect against poaching. NDAs can also be used to keep a possible sale under wraps so that your employees or competitors don’t know you’re thinking about selling/buying. They’re also used to engage parties for a set period of time to negotiate a sale or merger without fear a seller will look for another buyer.
QUESTION: HOW DO I PROTECT MY BUSINESS IN EMPLOYMENT CONTRACTS?
Non-compete provisions are now commonplace in an employment contract to help prevent a former employee from opening the same or similar business model. Typically, these agreements are effective for a term of years following the employee’s date of termination or leave. The protected area must be reasonable to the profession or service (e.g. a landscaper might be a 25-mile radius from business, but an online company might be a much larger area)
If you’re planning to sell your business, then you’ll want to have these agreements in place before you announce your plans. A potential buyer will want your key employees to have signed these, but your employees will be hesitant to sign later if they know you plan to sell. Accordingly, the best plan is to have in place when hiring a new employee, or contractor.
QUESTION: HOW CAN I AVOID COMPLICATIONS IF A PARTNER, TECHNICAL OR NON-TECHNICAL, OR INVESTOR WANTS TO LEAVE THE BUSINESS DOWN THE ROAD?
For this, you’ll want to have buy/sell agreements in place among your partners at the time your partner comes aboard. These agreements should include lifetime-buyout provisions (such as termination or disability) as well as death-time provisions. The agreement needs to answer: What if a party wants to sell his/her stock to a partner? What is the valuation technique? It’s also important that spouses of the partners understand the agreement as well because they are going to be bound by provisions at the time of death.
No matter your questions, LegalSpark is changing the way Atlanta’s entrepreneurs get legal advice. How easy is it for you to get expert counsel at any time from wherever you are via LegalSpark?
It’s a simple three-step process:
All of our lawyers go through rigorous screenings before coming on board. We conduct a full background check through the Georgia Bar association, personal interviews, and substantial training on making the most of a 20-minute call.
We just launched in May, and we’re eager for feedback too. So please drop us a line after trying out the service and let us know how we can improve and better help you protect your business.
Nick Gladd is chief legal officer for LegalSpark, a new tech company that’s changing how Georgia gets legal advice. Currently, more than 50 lawyers from across the state are available via the service. For more information, visit legalspark.com.