Accounting & Tax
Legal
There is plenty you can refine later when starting a company. You do not need complex reporting, an elaborate group structure or every possible legal document from day one.
But some decisions are much easier to deal with while the business is still small. Unclear founder ownership, missing IP assignments or months of business spending mixed through personal accounts can all become harder and more expensive to fix over time.
The priority is to get the foundations right without adding complexity the business does not yet need.
Keep the structure fit for purpose
Registering a company is straightforward. Deciding what should sit inside it deserves more thought.
If you have already been working on the business, IP, contracts, equipment or other assets may need to be transferred into the company. You may also need to consider how founders hold their shares. Trusts and holding companies can be useful in some circumstances, but they should serve a clear purpose rather than add complexity for its own sake.
The structure should work for the business now while leaving room to hire, issue equity and raise capital later. If venture funding is part of the plan, it is worth factoring that in early. The way you structure the business can affect much more than who owns the shares.
Get the founder arrangements clear
The share split is only one part of the founder setup. Agree on what each person is committing, how decisions will be made and whether equity will vest over time.
It is also worth dealing with what happens if a founder leaves, reduces their involvement or there is a serious disagreement. You do not need to document every possible scenario, but the important expectations should be clear before there is a problem.
Make sure the company owns its IP
This is particularly important where work started before the company existed.
Code, designs, branding, domains or other materials may have been created by founders, freelancers or agencies before the business was formally set up. Paying someone to create work does not necessarily mean the company owns the IP in it.
Agreements should deal with ownership properly, and earlier work may need to be formally assigned to the company. Our guide to protecting and assigning startup IP covers this in more detail.
Keep the finance side clean
Early-stage finance does not need to be sophisticated, but the records should be clear from the beginning. Open a company bank account, keep business and personal spending separate, and set up bookkeeping before transactions start piling up.
If founders put money into the business, make sure those contributions are properly recorded and treated in line with the arrangement in place, rather than left as unexplained transfers.
Tax registrations and payroll obligations become relevant at different stages, so it is worth dealing with them as they arise rather than reconstructing the records later. At a minimum, you should have a clear view of how much cash the business has, what it is spending and how long that cash is likely to last.
For what comes next, see our guide to getting startup finances ready for growth and funding.
Put agreements in place before they are needed
Startups do not need every possible agreement from day one. They do need the right agreement in place before a new relationship or commitment begins.
Before a contractor starts, have the contractor agreement sorted. Before a customer pilot begins, agree the commercial terms. Before offering equity to an employee, be clear on what is being offered and how it will vest. Our guide to equity and vesting covers this in more detail.
The same principle applies as the company prepares to raise capital. Keeping the cap table, company records and shareholder documents up to date makes the process much easier when investors are ready to engage. Maintaining an accurate company register along the way is part of that groundwork.
Keep the setup proportionate
A good startup setup is not about introducing the systems and processes of a much larger company. It is about knowing which decisions can wait and which are likely to cause problems if they are left unresolved.
Clear ownership, documented founder arrangements, properly assigned IP and usable financial records give the business a stronger base to build from, without adding unnecessary complexity.
LUNA brings legal and accounting support for startups together in one team, helping founders get the important setup work sorted without coordinating multiple advisers.