How do I start a business?

Most entrepreneurs and creators get their start by asking a straightforward question, “how do I start a business?” Starting a business requires careful planning, risk tolerance, dedication, and vision. Working with the right business lawyers can make it easier. Once you have determined an initial idea for your business, it is essential to thoroughly evaluate the market in which you will be operating (if there is one), and discover how you can best contribute to, or disrupt it with, your business idea.

You will then need to decide whether to establish a legal structure for your business, such as a C Corporation or a limited liability company. This will depend on the individuals involved in your business, tax implications, and liability risks. Once you have decided on the legal structure that is best for you, you will need to register your business in the jurisdiction(s) where you do business. This could be where you live or where you want your business to operate. This will include filling out some necessary paperwork and paying a registration fee. It is important to remember that this registration will need to be renewed yearly or biannually.

Finally, you will need to obtain a tax ID for your business in order to pay corporate taxes to the IRS. You will also need to apply for any licenses or permits relevant to your business. For instance, if you will be starting a food-related business, you may need to obtain the necessary health and safety permits from your local government.

How Do You Protect Business Ideas?

Depending on what is at stake, there are several options available to protect business ideas from being stolen or copied by others. If you want to ensure that your business partners or employees do not misappropriate or share important business ideas or information with others, your best bet may be to create a non-disclosure or non-compete agreement that includes certain restrictive covenants in it. These restrictive covenants, if drafted reasonably, can protect important and/or proprietary information. These types of agreements help to ensure confidentiality among employees and other individuals associated with your business, and they also protect against their leaving your company to create a competing business nearby that utilizes your ideas.

If your business idea is revolutionary or has required extensive money and time on your part, you may wish to obtain intellectual property protection to protect business ideas. These are legal protections offered by the government and typically require a fee to obtain. The main forms of intellectual property in the U.S. are trademarks, copyrights, patents, and trade secrets. If your idea, design, or trademark is complex or similar to those already registered by others, you may consider hiring an intellectual property attorney to help you navigate the patent, copyright, and/or trademark registration processes.

Why do so many Startups Incorporate in Delaware?

“Why do so many startups incorporate in Delaware” is one of the questions entrepreneurs and startup founders ask us the most. As co-founders or business partner(s) sit around a table and discuss the best ways to bring their startup to life, one of the topics that usually pop up is entity formation.

There are at least a half-dozen reasons startups and businesses choose to incorporate in Delaware over other states. Among the most important reasons that startups choose to incorporate in Delaware are: (1) favorable business tax regime; (2) more predictable legal outcomes in the corporate law realm; (3) a specialized court (Delaware Chancery ) for corporate law disputes; (4) well-established and robust protections for Directors, Shareholders, and Officers; (5) quick and efficient corporate services from the Division of Corporations; (6) corporate statutes allow more flexibility for a corporation than other states. These are some of the reasons more than 50% of publicly traded companies are incorporated in Delaware and more than 60% of the fortune 500.

While there are other benefits which not listed above, some cons exist as well. Among the cons are (1) additional costs, including a registered agent, extra franchise taxes, and foreign qualification fees, and (2) extra reporting requirements.

How long does it take to get a Trademark?

The question “how long does it take to get a trademark” comes up quite often during our initial brand protection consultations. Every application is different. Each Examiner reviews an application subjectively, so it’s impossible to predict how they will scrutinize any individual application. An application could have any number of minor defects that are easily curable. Alternatively, an application filed by an inexperienced individual could be flawed in a way that would force the individual to abandon their application altogether.

U.S. citizens do not need to work with a trademark lawyer, but it is highly recommended to do so. Additionally, a USPTO regulation that went into effect last August requires foreign applicants to work with a U.S. licensed attorney. Trademark law is always changing. Working with a lawyer who stays up to date on the latest trends, guidelines, and cases could help you save time, resources, and money.

Generally, we set the expectation that the entire process should take less than 10 months. Perfect applications are rare. While we have filed applications that were registered less than 7.5 months from the application date, the norm is closer to 9 months.

The chart below will give you a better idea of the entire process:


What’s the Difference Between Copyright, Trademark, and Patent?

A copyright is an original work of authorship fixed in any tangible medium of expression. Copyright covers both published and unpublished original works. This protection begins at the moment of creation. For works created by an individual, copyright protection lasts for the individual’s life plus 70 years. Anonymous works are protected for 120 years from the date of creation or 95 years from the date of publication. Examples of works covered by copyright include but are not limited to: (1) literary works (which includes computer software); (2) musical works, including any accompanying words; (3) pictorial, graphic, and sculptural works; (4) motion pictures and other audiovisual works; and (5) sound recordings.

A trademark (TM) is a symbol, word, or phrase that connects a product to a company. A service mark (SM) is a symbol, word, or phrase that connects a service to a service provider. A federal registration gives the owner exclusive right to use this registered symbol, word, or phrase throughout the U.S. (and potentially abroad), and prohibits others from using a similar mark, which could confuse consumers about whose product or service they are purchasing. Trademarks do not expire as long as you continue to maintain the mark and use it in commerce.

A patent gives an inventor exclusive rights to their invention for a certain period of time. To qualify for a patent, the invention must be useful, novel, and non-obvious. The United States Patent and Trademark Office (USPTO) issues three types of patents, and each has a limited duration. A design patent is valid for 15 years from the issuance date while utility and plant patents are valid for 20 years from the date the inventor files the application. Types of inventions that may be patented fall into the following categories: (1) machines, usually with circuitry or moving parts; (2) processes for producing tangible, concrete results; (3) matter compositions, like drugs or genetically altered life forms; (4) articles of manufacture; or (5) an improvement on any of the above.

What is an NDA?

An NDA (or confidentiality agreement) is a binding agreement between two (or more) parties that obligates a party (or parties) to maintain the confidentiality of the information being exchanged between such parties. This agreement also sets the exceptions of such obligations, how long the obligations last, and what happens if someone breaches these obligations. It is a widely used document and something many startups and small businesses will come across at least once. This document should be in your files and ready to use with prospective business partners and others, if necessary.  

An NDA is a great way to keep proprietary information and trade secrets protected from a business’s partners/vendors/suppliers, competitors, and even employees. However, one must be careful when drafting an NDA to make sure this proprietary information is truly protected. Most NDAs are set to expire after a certain period of time, thus throwing the trade secret protection into jeopardy. An NDA that expires would allow the receiving party to use the information or disclose it, therefore breaking the prong of secrecy. A properly drafted NDA will have a carve-out to protect the confidentiality of trade secrets for as long as they remain trade secrets under applicable law.