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All InsightsCorporate Advisory

Common Legal Mistakes Businesses Make Early On

6 min read

The legal decisions made in a company's first year tend to be the hardest to unwind later. A few of the ones worth getting right from the start.

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Founding without a shareholders' agreement

Co-founders agree on everything until they don't. A shareholders' agreement settles decision-making, exits and dilution while goodwill is high.

Mixing personal and business affairs

Clean separation between you and the company matters for liability, tax and credibility with anyone who later does diligence on the business.

Leaving compliance to later

Registrations, records and statutory filings are inexpensive to keep current and costly to remediate in bulk.

Not documenting the work

Scope, deliverables and payment terms in writing, every time — including with people you trust.

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