November 30, 1999 in Uncategorized

Common Legal Questions For Startups

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I saw this post from a Guy Kawasaki interview. It’s a great overview of some of the things entrepreneurs ponder when starting a company.  Although the questions are geared towards California entrepreneurs, they also apply to Georgia.  Of course, you should check with your attorney for specific details. Here are the questions addressed:

  • Can I start a technology company in the same business as my current employer?
  • When should I incorporate?
  • Why don’t I use a Limited Liability Company (“LLC”) since it is cheaper to start?
  • Why does everyone incorporate in Delaware?
  • Should we incorporate as an S corp or C corp?
  • Should I incorporate offshore since my business will focus on China/India?
  • Can I have everyone in my startup be contractors or consultants (“1099 services”) rather than employees?
  • How can I grant stock options to employees and consultants?
  • How does the corporation obtain ownership of the technology and IP from each of the founders which was developed before we incorporated?
  • Can I hire people away from my former employer
  • Can I file a provisional patent application myself?
  • If we have been issued a patent, won’t that stop a Microsoft from copying us?
  • Shouldn’t prospective investors sign non-disclosure agreements (NDAs) so that they don’t rip off our ideas?
  • If my buddies and I own more than 50% of the corporation, don’t we control it?
  • Why should founders vest–we’ve already been working on the business for two years?
  • Why does it cost $50,000 or more to do a round of financing?

See the answers on Guy Kawasaki’s blog.

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