Your start-up legal questions answered
First you’ll need to set up a company. Or maybe even two! Founders on a shoestring budget will often create just one vehicle which will own all business assets (like a trademark, other IP and cash). This vehicle will also be the trading entity. However if your budget permits, it’s a good idea to have two companies – one to hold and protect your assets, and the other to trade with customers and suppliers.
A shareholders agreement. This is probably one of the most important agreements for a start-up. It sets out the rules that will apply between co-founders, like how much each will invest, how decisions are made, and the process to follow if shares in the start-up are sold. Without a shareholders agreement, you will be relying on very basic default rules under the Corporations Act. These rules will usually not be a good fit for your business, and could lead to very costly disputes down the track.
You will no doubt have a brand name or logo that is uniquely yours. Registering a trade mark on the official IP Australia register is ideal, and will give you various rights and protections under the Trade Marks Act. Registration could also prevent other people from using a similar name or logo, as other start-ups and businesses often search the trade mark register to see if their proposed name or logo is already being used.
It’s critical to have a watertight employment agreement for your employees. It should be tailored for a start-up business, and should ensure that any intellectual property created by your employees is automatically transferred to the business. You will also need a confidentiality agreement to be signed by any non-employees that work with your business and have access to sensitive information or trade secrets.
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