Start-Up Law

Business Start-Up Law Info

Over the years, O’Gorman & Sandroni has helped with the launch of many startup companies.  We are sensitive to the needs of entrepreneurs.  Our focus is to advise founders on typical matters such as raising capital safely, how to protect their intellectual property and to accelerate their growth sensibly.

What You Should Know Before Starting A Business

Regardless of your industry, creating a limited liability entity is one of the safest ways to do business. O’Gorman & Sandroni are thoroughly versed in the nuances of business law and can help you make the most of your liability shield and avoid legal liabilities interfering with your personal life.

Beyond forming a limited liability entity, our legal team provides experienced advice and appropriate corporate documents for new businesses.

Employment Agreements

Every startup will eventually need to hire employees. The best practice to protect both the prospective employee and the startup in an employment relationship is through an employment agreement. These agreements typically detail, at the very least, the employee’s job title, job description, and expected compensation.

Perhaps what is most important for a startup is the “work-for-hire” provision in an agreement.  Work-for-hire agreements ensure that the rights to any intellectual property developed by the employees, during the scope of their employment, belong to the business, and not the employee. 

These agreements tend to be “at-will,” meaning the relationship can be terminated by either the employer or the employee for any reason or no reason at all. Later down the line, some startups may make key employees “for cause” meaning they can only be terminated for specific “causal” events. Documenting these relationships properly protect all involved parties, particularly in the case of a potential dispute.

Employee Manuals / Employment Handbooks

When a startup is thinking of hiring employees, the time is right to draft an employee handbook. The handbook should document the general employment policies and standard practices of the company, such as disciplinary policies, overtime procedures, policies surrounding privacy, use of technology, and confidentiality of the startup’s trade secrets. 

Employee handbooks also need to comply with state and federal laws regarding family and sick leave, discrimination, workplace safety, and sexual harassment. For an employee handbook to best protect the interests of the startup, it is not enough to be well-written before the startup hires employees. The handbook needs to be updated regularly to stay compliant with federal, state, and local laws.

Independent Contractor Agreements

Startups are likely to work with independent contractors before hiring employees. Although independent contractors work on projects for the startup similar to the employees of the companies, the independent contractors are in business for themselves, rather than working directly for the startup. 

Independent Contractor Agreements document the relationship between the contractor and startup by laying out the terms such as the specific project to work on, the compensation, and similar “work-for-hire” language to transfer any intellectual property developed by the contractor to the company.

It is important to respect the contractor’s independence when working with one. Despite the title of an Independent Contractor Agreement, the startup’s treatment of a contractor is what governs whether the worker is considered an independent contractor or an employee. 

If the startup exercises supervision, direction and control over the contractor, it is more likely that worker will be considered an employee, not an independent contractor. Startups should be careful when working with contractors to not only protect their trade secrets, but to make sure they treat their contractors with the separation the law requires.

Website Terms Of Service And Privacy Policies

One of the first major public-facing steps for a startup is to launch a website. The website might advertise a startup’s service or might be the source of the startup’s service itself. In either case, before the company website launches, the startup should have a fully drafted Terms of Service (also referred to as Terms of Use or Terms and Conditions). The Terms of Service govern the relationship between the user and the website – what uses of the website are authorized, what uses are unauthorized, limitations of liability, and how any disputes that arise may be resolved.

A startup’s website will also want to establish a privacy policy before going live. A privacy policy details what data the website collects from the website’s visitors, explains how the website will use that data, and describes how that data will be shared with any third parties (and the identity of those parties). 

Like the employee handbook, the privacy policy must be compliant with all federal and state laws. Note that startups should be aware of new data privacy laws, such as the GDPR in the European Union and CCPA in California, and consult a startup lawyer to draft a compliant privacy policy if they intend to do business in the EU, California or to stay on top of other data privacy laws.

Multiple Objectives, One Place

We know that entrepreneurs often wear many hats and we are no different. We can assist you with a wide range of legal issues related to starting a business. We offer practical advice in areas such as:

  1. Corporate Governance
  2. TrademarksCopyrights and Intellectual Property
  3. Commercial Real Estate Leases
  4. Financing
  5. Employee Benefits and Compensation
  6. Buying or Selling a Business (Mergers and Acquisitions)

Selecting An Entity

The first step in launching a startup is to select a business entity. Our team of startup lawyers can help you decide on the type of entity which best suits your needs. Business entities typically include some combination of centralized governance, limited liability, and either “double-taxation” or “pass-through” taxation. The appropriate type of entity depends on the intended strategy of the new business.

Corporation (c-corp)

A C-Corporation (or “C-Corp”) is perhaps the most well-known business entity. A C-Corp is an entity, created by but separate from its owners, formed to pursue the common goal of shareholder profit. For many purposes, a C-Corp is considered its own separate legal person – the entity can enter into contracts, own assets, and hire employees. C-Corps have a number of attractive features: control of a C-Corp is highly centralized, a C-Corp might exist perpetually, and C-Corps also grant limited liability to their shareholders.

There is also a great deal of law surrounding C-Corps, which provides predictability that can encourage investors to contribute to the startup early on. However, that same body of law can make C-Corps more cumbersome to navigate, particularly for a corporation with relatively few shareholders. C-Corps are also “double-taxed” – meaning the corporation as an entity is taxed on its earnings if any, and those same earnings are taxed once shareholders receive that profit as a dividend.

C-Corps are formed through the filing specific documents with the Secretary of States Office. The Articles (or Certificate) of Incorporation formally create the corporation – the Articles operate as the business’s charter, outlining the business’s basic information, governance structure, initial stock authorization, and identification of the statutes by which the corporation is formed. 

The Bylaws, in combination with the Articles of Incorporation, set out the mechanisms by with the business runs; when annual meetings are, how shareholder voting works, and how business decisions are made, among other things. The Director’s Initial Resolutions and Shareholder’s Initial Resolutions ratify the procedures that went into incorporation, list the initial corporate officers, and allocate the stock authorized by the Articles.

Two more documents do not need to be filed with the Articles, Bylaws, and Initial Resolutions, but are just as pivotal for a startup to have. The Shareholders’ Agreement lists the rights and obligations for the company’s shareholders; it describes how shares are priced and transferred (or restricted from transfer), and is a method for ensuring civility among a startup’s initial shareholders through listing clear procedure and providing methods of dispute resolution. 

Finally, small and privately owned C-Corps might use a Subscription Agreement to facilitate a sale of stock with a specific private investor, and the accompanying terms governing price, quantity, confidentiality, and return on investment.

S-corporation (s-corp)

S-Corporations operate in most ways indistinguishably from a C-Corp. The defining feature of an S-Corp is that its shareholders have filed a federal election with the IRS to alter how they are taxed. Rather than face double-taxation, S-corps elect to have their profits “flow-through” the corporate entity directly to the shareholders. 

In this manner, earnings of an S-Corp are only taxed once they reach the shareholders as profit. Startups considering filing as an S-Corp should note that, to properly file as an S-Corp, they may need to file an S-Corporation election with the Department of State of their respective State in addition to the same filing with the IRS.

Limited Liability Company (llc)

The limited liability company, or LLC, is a relatively new entity in comparison to the C-Corp, but has become a very popular entity for startups because of its flexibility. An LLC combines the limited liability of a corporation with the taxation structure of a partnership. This means that its owners (called “members”) are insulated from the LLC’s debts, while any profit the LLC makes is “flow-through,” similar to an S-Corp, by default.

LLCs are created by the prospective members filing Articles of Organization with the Secretary of State. The Articles of Organization lists the LLC’s basic identifying information. While initial resolutions are not mandatory for an LLC, it is good practice to to file accompanying Members’ Initial Resolutions and Managers’ Initial Resolutions, formally ratifying the Articles and the company’s formation. 

Finally, while not mandatory but highly recommended, a startup LLC needs to draft an Operating Agreement. An Operating Agreement is the document which details the structure and operation of the LLC; it species, among other things, how the LLC is managed, how decisions are made, how profits are split between the members, how new members can be join or leave the company, how membership interest is transferred, and how to resolve disputes which arise. 

The Operating Agreement is highly customizable, which offers more flexibility than a C-Corp, but that flexibility can also mean these documents need to be heavily negotiated to ensure it meets the startup’s needs, both immediately and in the future.

Balancing A Budget

Starting a new business can become expensive. You need to balance legal costs with the expense of running your operations. Understanding this, we put together a simple, Flat Fee Formation package that provides value and cost certainty.  Our Flat Fee Formation packages typically include all of the following services:

1. Discuss your specific intentions for the business;

2. Help you select a company name likely to gain approval from the Department of State;

3. Draft the appropriate founding documents for your new company:


  • Certificate of Incorporation
  • Shareholders’ Initial Resolutions
  • Director’s Initial Resolutions
  • By-Laws
  • Shareholders’ Agreement
  • Subscription Agreement

Limited Liability Company (llc)

  • Articles of Organization
  • Member’s Initial Resolutions
  • Managers Initial Resolutions
  • LLC Operating Agreement.

4. Prepare and file federal and state S-Corporation elections (if applicable);

5. Obtain a Federal Tax Identification Number (also known as an EIN) for the new company, which is typically necessary for tax and banking purposes;

6. Cover all third-party fees (including state fees) for the expedited formation of the LLC or corporation;

7. Cover all third-party fees associated with fulfilling the New York State publication requirement for LLCs (if applicable);

8. Provide startup legal advice;

9. Provide a memorandum summarizing important steps to take to preserve the entity’s limited liability status; and

10. Answer your questions startup questions related to the LLC formation or incorporation.

O’Gorman & Sandroni understands that every business is unique.  We customize our legal services to suit your specific needs.

We look forward to helping your startup grow.

Since 1985 Sean O’Gorman and Andrew Sandroni have been representing clients in all areas of the law. O’Gorman & Sandroni, P.C. was founded in 1989 on the principles of honesty, integrity, and the aggressive pursuit of our client’s goals.



3350 Greenwood Blvd,
Maplewood, MO 63143


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