Top 3 Legal Mistakes New Entrepreneurs Make (And How to Avoid Them)

Starting a business is exciting, but failing to address legal issues from the beginning can lead to serious problems down the road. Many new entrepreneurs are so focused on branding, marketing, and growth that they overlook important legal protections.

Here are the top three legal mistakes we see new business owners make—and how you can avoid them.

1. Not Forming the Right Business Entity

One of the first and most important decisions you’ll make is how to legally structure your business. Sole proprietorships may seem simple, but they offer zero protection for your personal assets. If your business is sued or takes on debt, your home, savings, and personal property could be at risk.

The Fix: Form a legal entity such as an LLC (Limited Liability Company) or corporation. These structures create a legal separation between you and your business, which helps protect your personal finances. An attorney can help you choose the right entity based on your goals, tax situation, and risk level.

2. Failing to Put Agreements in Writing

In the early stages of business, it’s common to work with friends, family, or handshake deals. But no matter how much you trust someone, not having clear contracts can cause confusion, conflict, and even lawsuits.

The Fix: Always get agreements in writing. Whether you’re partnering with someone, hiring a freelancer, or providing services to a client—put the terms on paper. Contracts should cover payment terms, responsibilities, deadlines, ownership of work, and how disputes will be handled. A well-drafted agreement protects everyone and can save thousands in legal fees later.

3. Ignoring Intellectual Property Protections

Your brand is your business. But if you don’t take the right steps to protect your intellectual property (IP), someone else could legally use your name, logo, or content - or worse, claim you stole it from them.

The Fix: Do a proper trademark search before choosing your business name, and register your trademark as soon as possible. This protects your brand and gives you legal recourse if someone tries to copy it. Also, make sure you have proper licenses or permissions for any images, music, or content you use. If you’re developing products, software, or content in collaboration with others, be sure your agreements clearly assign ownership rights to your business.

Protect Your Dream from Day One

Legal mistakes are easy to make, but even easier to avoid with the right guidance. A small investment in legal help early on can save you from massive expenses and stress later. Brinkley Law helps new entrepreneurs build strong legal foundations so they can focus on what matters: growing their business.

Ready to get started the right way? 

Contact Brinkley Law today to schedule a business startup consultation. Let us help you avoid common pitfalls and protect the business you’ve worked so hard to build.