Things to Consider When Establishing a Startup

To commercialize a startup project, generate value that brings income, and, in other words, ensure a successful setup, it is important to consider several critical points. From the very beginning, it is essential to establish a solid and legal foundation to take professional steps. Completing these requirements is crucial for future investor searches. Investors evaluate not only the idea but also whether the values the project will create have a solid financial and legal structure when deciding to invest in a startup. Therefore, it is critical to build the startup’s legal and organizational structure on strong foundations.

First, the startup’s activities must comply with regulations, must not contain any criminal elements, and must not violate the intellectual and industrial property rights of other companies or startups, nor engage in unfair competition.

Secondly, it is essential to sign a Shareholders’ Agreement (SHA) between the founding partners that regulates the distribution of tasks, rights, and responsibilities among them, share allocation, decision-making procedures, representation, and the potential termination of the partnership. This agreement is crucial for a healthy and corporate start.

After signing such an agreement, the founders must decide on the most suitable type of company for their startup. In this decision-making process, they need to consider the rights, legal and criminal responsibilities of being part of the company’s bodies, the functioning of the general assembly and board of directors, meeting and decision quorums, responsibility levels, and minimum capital amounts associated with the chosen company type. A company’s articles of association should be prepared according to the type of company established and the signed Shareholders’ Agreement, making the company ready for operation.

Another important issue at the beginning is ensuring legal protection for the business idea/model before moving on to the marketing and advertising phase. Intellectual property is the most valuable asset for startup companies. Therefore, securing intellectual and industrial rights is essential for the protection of a startup. For example, registering the brand, obtaining patents for inventions or utility models, and securing copyright protection for any works are crucial. Investors are generally reluctant to invest in companies with unclear intellectual property. Intellectual property lawsuits can impose burdens that most startups cannot bear. Applications for the types of protection mentioned should be made while the product is still in development, before it is brought to market and before marketing and advertising processes begin, to prevent malicious third parties from acting first. It is also crucial to determine the most suitable protection for a startup, check for any prior applications, and thus minimize the risk of rejection or cancellation of the application.

In summary, there are three key points that startups should focus on during the establishment phase: signing a well-prepared Shareholders’ Agreement between the founding partners, selecting and establishing the most appropriate type of company for the startup’s structure and goals, and ensuring the necessary legal protection for the intellectual and industrial rights owned by the startup or its founders.