Although Dublin has the highest concentration of start-ups, this activity is by no means limited to the capital city. Startup Ireland’s map of the country’s start-up sector shows an encouraging spread of start-up enterprises across the four corners of the land - and in the middle too!

Start-ups are portrayed to be highly creative places with hugely motivated people working long hours to bring their ideas to fruition. And these busy start-ups can go on to become huge businesses. In fact, Ireland has produced a significant number of start-up success stories.

However, legal issues for start-ups can cost more than just money, and hamper the opportunity the enterprise has to scale and become a big business. We’ve listed a number of items in this post that we’d encourage founders and professionals involved with start-ups to consider at the early stages of building their start-up business.

1. Have a scrupulously clear and legally binding deal in place with co-founders

At the risk of sounding trite, it’s all fun and games until the start-up makes money. Then all sorts of disagreements come to the fore and people realise they have different understandings of how things should proceed. Ask Mark Zuckerberg, he knows.

If your start-up consists of co-founders, make sure all of you are in complete agreement right at the very beginning as you set up your start-up. This is the best way to be fair to each person no matter what the start-up goes on to achieve. Ensure this founder agreement is written down and guided by a legal professional who is experienced in contract law.

This document should cover among other things:

  • Who owns what percentage of the company
  • What each person gets paid
  • A record of what each founder has contributed to the start-up (money and other assets)
  • How disagreements among the co-founders are dealt with
  • Details of the responsibilities of each co-founder
  • What decision-making process will be followed to sell the business
  • How the profits  of the business will be divided up

2. Protect your Intellectual Property

The nature of start-ups is that they’re often doing something completely new. As such, many of these enterprises develop considerably valuable IP. A lawyer can help founders decide on the right way to protect their intellectual assets so that the unique technology, product or service they have developed stays their own property.

Protecting intellectual property can include the following measures:

  • Non-disclosure agreements (especially important if you hire people)
  • Trademarks
  • Copyright
  • Patents
  • Trade Secrets (one of the ways Coca Cola protects its recipe for the soft drink)

3. Choose the right legal entity for your start-up

Start-ups often cost themselves a lot of money they needn’t have paid if they had have been set up with the right structure at the start. Many founders, especially if they envision themselves working on their own for a while, don’t involve a lawyer to set the business up as a corporation or limited company and this is a decision that has the possibility to incur higher taxes.

4. Make sure you have the right documentation for staff

It’s a good idea to get as much of the paperwork done as you can prior to employing people. Scaling often happens quickly and you could find that you employ a number of staff one after the other with little time between appointments. Documents like an employee contract and a non-disclosure agreement are the bare minimum to have in place.

5. Create a customer contract

A customer contract is worth its weight in gold as it protects both parties. Although you can use a contract template, and these are freely available on the internet, it’s important to personalise the contract to your business offering.

A founder spending time with a solicitor who specialises in commercial law is a wise investment. It can remove a lot of headaches and place the start-up in a strong position for growing into a big business. Augustus Cullen Law has a dedicated commercial law team who is vastly experienced in all forms of commercial law. Contact us to chat about how we can help your start-up.

20 January 2017

    Dear Joice… you are and have been very professional, sympathetic and dignified in all of your dealings with us and I put that down to one simple fact. You listened.

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    Many thanks again for a job well done. We really appreciate all your hard work and practical advice.

    Corporate client in a commercial litigation matter

    Dear Jamie, You and your team in ACL were so professional, diligent and prompt. I have recommended you and the firm, and will continue to do so.

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    Gus Cullen and the firm’s approach to addressing the key issues was professional, yet personal, efficient yet attentive.


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