I was having a conversation with iBidAM.com’s brilliant expert Lawyer & Commercial Counsel, David
Windsor, the other day about some of the mistakes we have made and how we
always managed to pull ourselves out of it.
How we only wish we had of known some things from the start.
So it gave me the idea that, since Dave has some extensive knowledge with over
15 years experience mentoring entrepreneurs to start-ups, to SMEs to corporates,
sharing his legal, commercial and strategic know-how, and network, with the
prime focus of achieving growth for his clients – I thought I’d pick his brain
and share it with you for FREE!! Yay FREE
ADVICE from a lawyer, you don’t get that every day!!!
Thoughts From Dave’s Brain…….
- Set
yourself up correctly from the start
- There
is nothing more exciting than starting-up a business. To see your idea come to life and brave
the big bad world. Be it by yourself;
with some old school mates; family members; professional colleagues that
you've met along the way; or complete strangers; it is paramount that your
business and specifically the structure of your business and relation of
the founders is set up properly at the start.
- As
entrepreneurs or innovators founding a business it is critical that you
familiarise yourself with the range of structures, entities and strategies
available to you. From Companies to
Trusts to Partnerships to Sole Trader - each has its advantages and
disadvantages - including asset protection, income tax treatment, capital
gains tax treatment, profit distribution, entry and exit strategies,
access to Government grants & concessions, etc.
- Moreover,
once you decide on a structure both for yourself and the business (and
when I say yourself - I mean you as one of the owners / founders) then I'd
strongly suggest that you put in place a comprehensive agreement between
yourself and your fellow founders (an Equity Holder's Agreement) so as to
govern your relationship, manage your respective expectations and provide
for the smooth operation of your business.
- Finally,
I'd counsel you to ensure that everyone that works for the business
(whether as a Director, Contractor, Consultant or Employee) enter into
Service Agreements that cover off at an absolute bare minimum the
development and protection of the businesses confidential information and
intellectual property, along with dealing with such matters as rates of
remuneration, services to be performed, etc.
- It
might seem like a lot to start off with, but remember two things: 1) It's
a hell of a lot more costly, time consuming and risky to
"re-structure" a bad structure than to start off with a good
one; & 2) Agreements are for the bad times, not the good times - hence
the best time to write them is when you are all happy and most importantly
- in agreement!
From time to time, I’ll share some more wisdom from ‘Dave’s Brain’!
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