The Steps And Procedures A Star Up Company

2144 Words Dec 19th, 2014 9 Pages
OVERVIEW OF INSULATING A START-UP COMPANY FROM THE HIGH RISKS AND COSTS OF CIVIL LITIGATION, SO THE START-UP CAN REMAIN IN BUSINESS

This memorandum briefly summarizes the main steps and procedures a star-up company should take to protect itself from the inherent risks of insolvency, if sued. This memorandum provides general advice and may not cover a particular situation (see further information and disclaimer at the end of the memorandum).

Introduction

Most start-ups generally share two compatible and unfortunate characteristics: they are high-risk and resource poor. Normally, if a start-up company is sued, the start-up faces two possible scenarios. The first scenario: the start-up cannot afford to employ an effective attorney or build a compelling defense in litigation. There, the start-up likely loses and is forced into insolvency because the start-up simply does not have the financial assets to endure the situation. The second scenario: the start-up is successful in litigation, but the litigation is so expensive that the start-up is still forced to go out of business.

With this basic understanding of challenges faced by start-up companies, this memorandum will set forth the strategies Highland Concerts, LLC, (“HC”) can implement in order to avoid the risks posed by civil litigation to ultimately remain in business. First, the most successful and simplest approach is avoiding disputes all together–this, of course, is much easier said than done. A second…
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