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From business structure to taxes, there are numerous legal issues to address when starting a company, many of which can bring a promising start-up to a grinding halt if the proper steps are not taken. The following four issues most frequently cause problems.

  1. Trademarks :  Register your trademark. Simply reserving a domain name does not guarantee legal rights. Since interNIC does not deal with trademark disputes, federal trademarks take precedence over domain registrations. Unregistered trademarks do not hold up well; it is best to register the trademark federally. However, the PTO will not register a trademark if it is not distinctive enough. The U.S. government's trademark database can be accessed at

  2. Deals with cofounders :  Document all deals with cofounders in case disputes arise at a later date.

  3. Employees :  Consider legal issues of hiring employees. The largest area of potential liability for an entrepreneur often is employment law. Employees have many legal rights that must not be neglected.

  4. Contract liability :  Establish limits of liability in contracts by limiting the maximum liability to that of the contract and by excluding consequential damages.

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