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5 Laws I Wish I Knew Before Starting a Business

Posted on 1.23.2014

:: By Ilan Nass, Fueled ::


The most common way for today’s entrepreneurs to start their companies is to lock themselves in their garage and start designing, planning and writing code. While this passion and blind faith is essential for coming up with great ideas for great businesses, there is more to creating a startup than just enthusiasm alone. Small startup companies are vulnerable to making costly mistakes, so it's compulsory to familiarize yourself with every law that your type of business must follow.

A visit to your city's Business Development Office would be beneficial to see if there are any laws that are concerned specifically with your niche, and in this article we'll take a look at some areas of law relevant to any company, which you must get fully acquainted with before starting a business.

1. Email and Internet Marketing

When using email campaigns to market your startup, it's pivotal that you don't fall foul of CAN-SPAM laws. There are certain steps you need to follow to ensure that your outgoing emails do not get classified as illegal spam.

CAN-SPAM laws require you to follow these caveats:

·Don’t use false or misleading header information.

·Don’t use deceptive subject lines.

·Identify the message as an ad.

·Tell recipients where you’re located. Your message must include your valid physical postal address.

·Tell recipients how to opt out of receiving future email from you and then honor those opt-out requests.

2. Workplace Health and Safety

Health and safety is something on everyone's lips at the moment, and it should be taken very seriously when starting a business.

The Occupational Safety and Health Administration offer outreach programs, which aim to help startups abide by health and safety regulations in the work place. Make sure you're not only aware of the laws protecting employees, but also that your business carries out all requirements; there are strict punishments for those who fail to comply.

3. Legal and Financial

A startup will more than likely find the complexity of the numerous financial and legal laws confusing. Even though the hourly rates for a good lawyer can be astronomical, for a first-time entrepreneur it's so important to hire professional lawyers for different aspects of your business. It's said that good quality lawyers will in effect pay for themselves.

The three types of lawyer needed for a tech startup are as follows:

·Corporate Lawyer – Advises on daily matters and cover the basic documents.

·Intellectual Property Lawyer – If you've got any IP you need to protect, then an IP lawyer isn't a choice but a must.

·Deal Lawyer – Takes care of sales or financial transactions.

Additionally, a bookkeeper is ideal for taking care of payroll and basic monthly revenue figures, while an accounting firm would be a good move for keeping track of taxes.

4. Customer Privacy

Every business deals with and stores customer information on a daily basis, whether it be credit card numbers, home or email addresses, social security numbers or phone numbers. And each business has a legal obligation to protect people's Personally Identifiable Information at all costs.

Therefore, one thing every startup must not avoid is forming a Privacy Policy. Being transparent with your consumers about how their data is stored will help immensely. Make sure they understand that their data is being used for their benefit as opposed to being used against them.

Get your lawyer to write a legally sufficient privacy policy and explain how you are using consumers’ data to improve their experience with your company.

5. Patents

The America Invents Act of 2011 (of which central provisions came into effect in March 2013) changed the long standing U.S. Patent system from a “first-to-invent” system (which had been proposed in the Constitution by the Founding Fathers) to a European style “first-to-file” process. This means it'll now be far more convenient for corporations to deflect patent-infringement lawsuits from inventors.

It's now more important than ever that you race to patent your invention before a corporate goliath hears about it and beats you to the punch.


Ilan Nass is the head of marketing at Fueled, the world’s premier development and strategy firm specializing in creating Android and iPhone apps.

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