In the zealous attempt to get a startup to market, legal issues can often be disregarded during the run-up to launch. Key legal issues should ideally be addressed at an early stage to minimise risk and maximise the value of your investment. The considerations below are a starting point and in no way constitute an exhaustive list of legal issues that need to be considered.
Structure of the business
One of the first questions is how your business should be structured from a legal perspective. Setting up a limited company in which you, your business partners and any investors can hold shares, is usually a preferred option. This has the key advantage of limiting personal liability of the owners of the company. The company has a separate ‘legal personality’, and can borrow money and enter contracts in its own right. Other main types of business structure in New Zealand are…
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