Ultra Light Startups debuted its new meeting space Tuesday night while presenting a Legal Roundtable discussion for nearly 40 eager participants. The panel was comprised of three attorneys who advise entrepreneurs including Jonathan Freedman, Sam Guzik and Stephen Chin.
Jon Freedam kicked things off by addressing the two basic advantages of becoming a legal entity:
1) Liability protection – Ensuring that your company is signing a material contract and not you as an individual.
2) Becoming an entity allows you to regulate the relationship with your business partners.
He stressed that limiting personal liability from the company is a vital step in building an organization and protecting yourself at the same time.
Sam Guzik presented some advantages of the Convertible Debt, a loan that can convert to equity under certain circumstances. The convertible debt allows an investor to recover investments through a variety of methods including asset liquidation.
Guzik also addressed some of the legal issues that can derail financing or acquisition:
1) A muddled line of ownership within the company hierarchy.
2) Not knowing or understanding what investor restrictions are already in place.
3) Missing critical documents or lost paperwork.
Finally, Stephen Chin explored the complexities of trademarks, copyrights and patents.
Regarding trademarks, Chin says that the law begins to recognize a trademark as soon a company starts using one and it is not that difficult to get. He says the trademarking process should begin when a company begins a large or costly advertising campaign.
As far as getting a copyright, he says you don’t have to spend money on that until you actually encounter someone copying your work.
When it comes to applying to a patent, hold on for an expensive and complicated process that could take 2 to 3 years to complete.
