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Start-ups are an increasingly popular entrepreneurial approach to business. The advantage of control over business development, branding and corporate responsibility, and scalability are impossible to ignore. However, start-up companies face many unique challenges as they grow, and those challenges can often result in legal disputes between interested parties.

Roles of Stakeholders

One of the most common differences between a start-up and an established business, whether or not a shareholders’ agreement, partnership agreement and other legal documentation was used in the formation of the start-up, is the often ignored legal distinction between employees, contractors, shareholders, or partners in a start-up – since individuals in start-ups sometimes take on multiple roles, and compensation for work or knowledge is often provided in the form of equity or other alternative arrangements.

This is a common issue whether the start-up’s business purpose concerns information technology and data analysis, consulting services, green-tech, software and app development, or other industries where start-ups flourish.

It is not uncommon for start-ups to rely on the knowledge, skill, patents, trademarks, intellectual property and connections of certain stakeholders in getting the business off the ground, often without giving thorough consideration to, or legal characterization of, that individual’s role in the business – contractor, partner, joint venturer, director, officer, shareholder or investor.

Disputes about management, control and ownership of the technology, know-how, or intellectual property often arise.

Disputes Between Majority and Minority Interests

Disputes often arise even when a start-up succeeds, since directors, officers, employees, contractors, shareholders, and other interested parties may re-assess their positions in light of the success and seek to capitalize on their early involvement.

Majority, minority, or equal stakeholders often find themselves in disputes with each other which may involve a stakeholder or group of stakeholders wrongfully obstructing the operations and growth of the start-up, or wrongfully seeking to “squeeze out” or oppress opposing interests, requiring prompt and agile legal response.

Why Choose Gilbertson Davis

Gilbertson Davis LLP has lawyers with experience in dealing with business disputes for companies of all sizes, including start-ups and closely held corporations.

Startup Company Disputes

We can assist in providing prompt and cost-effective advice relating to:

  • Shareholder agreement disputes, including oppression claims
  • Partnership and Joint Venture disputes
  • Enforcing Buy/Sell and Shotgun clauses
  • Investor and crowdfunding disputes
  • Corporate compliance and regulatory issues
  • Business Agreement Disputes
  • Deadlocked boards of directors
  • Enforcing or defending intellectual property claims
  • Claims involving breach of privacy or confidentiality
  • Licensing disputes and franchising disputes
  • Employment and Dependent Contractor disputes
  • International and cross-border disputes
  • Technology Contract Disputes

It is important to obtain prompt and effective legal representation, before these issues become significant, since these disputes may dramatically impact your growth and momentum in the start-up industry while they remain outstanding.

If you operate a start-up business, or are a shareholder, investor, director, officer, partner, joint venturer, contractor or employee of a start-up with a legal dispute, contact us for an initial consultation.