Entrepreneurs are often caught up in the excitement of starting a business and get ahead of themselves when it comes to the paperwork. If the appropriate paperwork is not taken care of before a new business gets off the ground, the business could fail without even having a chance to succeed. Maryland entrepreneurs would most likely benefit from finding out what legal paperwork they need and getting it executed before any problems arise.
Friendships and collaborations are part of what make some businesses a success, but that does not mean that a plan should not be in place in case these relationships end. Just as newly engaged couples in Maryland are encouraged to consider a prenuptial agreement, business partners are also encouraged to execute an agreement regarding the rights and responsibilities of each party. Any discomfort the parties might feel negotiating the agreement could pale in comparison with ending up in a courtroom battle.
The need for the appropriate agreements does not stop at development agreements. Many companies have intellectual property, such as a trade name, trademark or patent. A contract outlining that the company will own all of that property can save problems in the future if one of the partners leaves. In some cases, it may also be appropriate to require everyone affiliated with the company to execute non-compete and/or confidentiality agreements in order to reduce the likelihood that the company's IP is compromised. That may still happen, but the agreements would provide the company with legal remedies.
Most every Maryland entrepreneur is anxious to get to the "fun" part of a new business. However, that fun may not last if time is not taken to solidify the company's business relationships in writing. Of course, the hope is that the legal remedies outlined in the agreements will never be needed, but without them, nothing less than the future success of the business could be at stake.
Source: michipreneur.com, "4 Legal Issues Entrepreneurs Should Address", Jeff Koegel, June 25, 2015