Legal Tools Entrepreneurs Must Know to Protect Their Business

Written by Wesley Henderson

May 28, 2022

Entrepreneurs have a lot on their plate when it comes to starting up their own business. There’s a lot of important things to do for your business as you start. One thing that often gets overlooked is shoring up legal protections. We think one of the reasons is that you may not know what tools you have at your disposal, so here’s a rundown of some of the important tools you can use. It’s up to you to know when and how to implement them. Use Drafted Legal for Your LLC and templates. And if you need customized advice, contact a lawyer (a good one is here). You may not need all of these tools; the important thing is to be aware of them so you know what to use and when.

Protect Your Personal Assets with LLC

There may be nothing better you can do for peace of mind than to use an LLC. And use it properly. What an LLC does is separate your business from you personally. You need to register with your Secretary of State, execute an operating agreement, and get a separate business bank account. You can Start Your Business LLC here or you can go directly to your secretary of state’s webpage and register your LLC directly with them.

Benefits: Debt and Liability Protection, Peace of Mind, Professionalism, Taxation Benefits (speak with CPA)

Protect Your Brand with Trademarks

Trademarks in commerce are used to establish your rights to a word, phrase, symbol, or design that distinguishes the source of goods. This can include slogans, brand names, and logos. Trademarks do not require registration and do not expire after a set period of time. Trademarks provide protection as long as the owner continues to use the trademark in ordinary commerce.

Protect Your Words with Copyrights

Registering for a copyright allows you to prosecute when there is an infringement on your rights of your copyright of your work that is fixed and original. Copyrights give you the right to reproduce the work, prepare derivative works, distribute copies, perform the work publicly, and display the work publicly. To vest a copyright, the work needs to be original and reduced to a tangible medium, like a writing, hard drive, or recording. Once vested, you can register your work with the Copyright Office to ensure you are deemed the owner. The rights of a copyright last for the life of the creator plus 70 years. 

Protect Your “Secret Sauce” with Trade Secrets

If your business is centered around a very essential piece of information like a recipe, special manufacturing process, or list of clients, registering for a trade secret is very important so other companies can’t take advantage of your business idea. If the secret is disclosed, you will lose protection for your idea, like if a competitor independently developed something similar, you can’t stop them. It would also be a good idea to have employees sign non-disclosure agreements to keep the trade secret from being disclosed to outside sources. Trade secrets provide protection indefinitely so long as it is not disclosed to the public.

Protect Your Inventions with Patents

Patents are time-sensitive and is recommended when entrepreneurs are developing new products. Patent laws honor the first person to file a patent, not the first person to make the product, so you should make sure to file for a patent as soon as possible. Talking to a patent attorney can help you with the process to ensure growth and sustainability for your product. Patents have a term between fifteen and twenty years and cannot be renewed.

There are three different types of patents: utility, design, and plant. Utility patents protect the way your invention functions whereas design patents protect the way it looks. Plant patents are used for invented plants from reproduction. Design patents only last for 15 years and utility and plant patents last for 20.

Protect Your Time, Business, and Bottom Line with Client Agreements

If you are providing a service directly to your clients, it’s imperative that you have an agreement with them. This sets the stage for your relationship and usually ensures that the relationship is a good one because both parties know what they are getting. Problems typically arise in these relationships when one party thinks one thing and the other thinks another thing – whether about timing, deliverables, pricing, or otherwise. There’s a lot of great clauses you can include in here to make sure you are protected while also being fair to your clients/customers.

Pro Tip: Hire an attorney or use Drafted Legal’s Attorney Drafted Templates

Other Agreements that Entrepreneurs Might Use

Non-Disclosure Agreements

A non-disclosure agreement as I mentioned earlier is a contract that can provide extra protection to your business if you plan to work with others on your idea. The agreement will be between you and those you plan to work with on your idea that states that they will not disclose your idea or share your information with others. Also referred to as a confidentiality agreement. This agreement allows you to open up private portions of your business to outsiders without having to worry about having that idea stolen.

Non-Compete and Non-Solicitation Agreements

These are similar to non-disclosure agreements but it prevents others from starting a similar business. Working a non-solicitation agreement with your non-compete agreement can prevent someone from stealing your employees or clients. These can provide a little protection within a small radius of your business for a small amount of time. The noncompete prevents an employee from being trained by you, leaving and competing immediately. The nonsolicit is a very smart agreement that prevents your employees from poaching clients or other employees. So even if you opt not to use the noncompete agreement because not appropriate or desired, you should almost always use a nonsolicitation.


Being an entrepreneur is exhilarating. It can also be overwhelming. You have to know it all from web design to marketing to bookkeeping to HR to legal. We hope the above tools have been helpful to you. Please contact us with any questions. We can pair you with an attorney if needed or help fit you in the correct agreement for your business.

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