1. What Should Founders Check before Starting Operations?
A formation filing may be complete even though the company is not ready to open. Before signing a lease or taking orders, confirm who can bind the company and whether its planned activity needs approval. A missing license can delay the opening.
Confirm Legal Status and Signing Authority
- Entity: Check the legal name, formation filing, and designated managers or officers.
- Authority: Identify who can sign contracts and approve major spending.
- Records: Keep governing documents and approvals for substantial commitments.
Identify Launch Dependencies
- Premises: Check zoning and occupancy approvals for the proposed use.
- Customers: Set payment, delivery, and cancellation terms before trading.
- Permits: Identify any license required before a regulated activity begins.
For entity-selection and filing steps, see startup incorporation in New York.
2. Who Can Sign Contracts and Make Startup Decisions?
Co-founders often divide responsibilities informally, then discover they disagree about who can commit company funds. Their governing documents should separate everyday management from decisions requiring member or board approval. Signing authority also deserves attention in outside contracts.
Review the Operating Rules
- LLC: LLC Law § 417 requires a written agreement adopted before, at, or within 90 days after formation.
- Corporation: Review bylaws, board powers, and adopted resolutions.
- Delegation: Document any limits on signing authority and spending.
Document Founders' Rights
- Ownership: Verify issued shares or LLC interests against company records.
- Decisions: Define voting, manager powers, and reserved matters.
- Departures: Review transfer restrictions and agreed exit terms.
3. When Can a Founder Become Personally Liable?
A lease in the company’s name may still leave a founder personally liable if it includes an individual guarantee. That promise is separate from the company’s debt. Its scope and release conditions deserve attention before signing.
Separate Company Debts from Guarantees
- Company signature: Identify the entity as the contracting party.
- Guarantee: Check whether a founder separately promises payment or performance.
- Other exposure: Entity status does not necessarily shield a founder from personal wrongdoing.
Review High-Exposure Terms
- Lease: Check guarantee scope, duration, and any agreed release conditions.
- Loan: Review collateral, default triggers, and individual commitments.
- Indemnity: Check which parties bear specified claims and losses.
A separate commercial lease review can address occupancy costs and personal guarantees.
4. Which Early Contracts Deserve Legal Review?
A first customer agreement may say little about late payment, revisions, or ownership of finished work. A supplier template may shift substantial costs to the startup. Founders should compare those provisions with how the business plans to deliver its services.
Check Customer and Supplier Terms
| Contract Issue | Question to Resolve |
|---|---|
| Payment | When are invoices due, and what happens after nonpayment? |
| Delivery | Who defines acceptance, changes, and missed milestones? |
| Exit | When can either party terminate, and what remains payable? |
Review People and IP Terms
- Workers: Review worker classification and applicable employment obligations.
- Work product: Document ownership and any assignment of created intellectual property.
- Information: Set confidentiality and permitted-use obligations.
5. Which Registrations and Permits May Apply?
Formation, authorization to do business, and operating licenses address different questions. An out-of-state company may need authority from the Department of State, while local agencies regulate particular activities. The answer turns on what the company does and where.
Check State Filings and Deadlines
- Foreign entity: Assess authority requirements for an out-of-state corporation or LLC.
- LLC publication: For most domestic LLCs, publish and file proof within 120 days of formation.
- Biennial statement: Domestic and foreign business corporations and LLCs generally file every two years.
Identify Operating Permissions
- City license: Check the relevant agency and permit requirements for the activity.
- Premises: Review zoning, occupancy, and building-related approvals.
- Federal: Check tax registration and any industry-specific federal requirements separately.
6. How Should Founders Prepare for a Legal Review?
A founder facing a lease deadline needs a different legal review from someone still testing a product. Start with the next commitment and the documents supporting it. That makes it easier to define the attorney’s work and related costs.
Bring the Key Documents
- Entity: Bring formation papers, governing documents, and ownership records.
- Commercial: Provide draft leases, customer terms, and vendor agreements.
- Launch: Explain the activity, proposed address, workers, and target opening date.
Prioritize the Legal Questions
- Immediate: Flag contracts, permits, and filings needed before launch.
- Responsibility: Identify personal guarantees and disputed signing authority.
- Scope: Separate attorney review from accounting and technical submissions.
Ongoing questions may also fit SJKP's startup legal services.
7. Frequently Asked Questions
How much does a startup lawyer cost in NYC?
Fees depend on the documents, negotiation involved, and whether ongoing advice is requested. Ask which deliverables the engagement covers.
Can a founder sign a contract before incorporation?
Yes, but signing before the entity exists can create personal liability. Later formation does not by itself release the signer.
Can a startup operate under a name different from its legal name?
Generally, yes. A corporation or LLC using an assumed name must file a Certificate of Assumed Name with the New York Department of State.
Does missing LLC publication invalidate signed contracts?
No. Failure to meet the publication requirement can suspend the LLC’s authority to conduct business, but it does not invalidate its contracts or acts.
8. Discuss Startup Launch Requirements with Sjkp
SJKP's attorneys can review signing authority, founder obligations, launch contracts, and registration questions. Bring draft agreements, planned activities, and upcoming deadlines so the discussion can focus on decisions facing the business. Tax and technical matters may require other professionals.
19 Mar, 2026
