{"id":4440,"date":"2025-08-06T08:00:00","date_gmt":"2025-08-06T08:00:00","guid":{"rendered":"https:\/\/entrepreneurship.asu.edu\/blog\/?p=4440"},"modified":"2025-08-01T17:53:36","modified_gmt":"2025-08-01T17:53:36","slug":"starting-smart-essential-legal-considerations-for-new-businesses","status":"publish","type":"post","link":"https:\/\/entrepreneurship.asu.edu\/blog\/2025\/08\/06\/starting-smart-essential-legal-considerations-for-new-businesses\/","title":{"rendered":"Starting Smart: Essential Legal Considerations for New Businesses"},"content":{"rendered":"\n
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Photo by Getty Images Signature<\/em><\/figcaption><\/figure>\n\n\n

Turning an idea into a business is one of the most exciting moves you can make, but it also brings legal responsibilities that many founders overlook. Whether you are a student launching a product, a community innovator testing a concept or a faculty researcher spinning out a company from university research, understanding the legal terrain early is essential to protecting your idea and building a successful venture.<\/span><\/p>\n

At ASU\u2019s Edson Entrepreneurship + Innovation Institute (Edson E+I), we support entrepreneurs of all backgrounds and stages. If your innovation was developed using ASU resources or funding, Skysong Innovations is your essential partner for protecting and licensing university-owned intellectual property (IP). For those working with their own IP, knowing how to secure legal protections and build strong operational foundations is just as important.<\/span><\/p>\n

Protecting Intellectual Property (IP)<\/b><\/h2>\n

First, what is your intellectual property? IP is often your most valuable business asset. It includes trademarks, copyrights and patents. Your trademarks cover what makes your brand unique, like your brand name, logo and slogan. Your copyrights cover original works, like writing, designs, code and videos.\u00a0<\/span><\/p>\n

Patents can be a little more involved. In the U.S., a patent gives the inventor the right to exclude others from making, using or selling their invention. It does not automatically give you the right to use the invention, especially if other regulations apply, such as FDA approval. Patentable subject matter includes machines, processes, compositions of matter and certain software. Naturally occurring substances are not typically patentable unless significantly modified.<\/span><\/p>\n

Here are 7 legal considerations you should understand as you launch your business and protect your IP.\u00a0<\/span><\/p>\n

1. Your Legal Entity<\/b><\/h4>\n

Once you have an idea and are ready to launch, consider the type of legal entity that makes the most sense for your business. The legal structure you choose affects everything from how you pay taxes to how much personal liability you carry.<\/span><\/p>\n

Many businesses start as a sole proprietorship. These organizations are easy to form but this structure can expose your personal assets to business liabilities. Another popular structure is the partnership. If you are building a business with a co-founder, a partnership offers shared ownership and requires clear agreements to avoid disputes.<\/span>

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You can also launch as a Limited Liability Company (LLC). LLCs are popular because they protect your personal assets and offer flexibility. Finally, you can look at creating a C-Corporation, which are often chosen by startups planning to scale or raise capital.<\/span><\/p>\n

Tip<\/b>: Edson E+I\u2019s Venture Devils program can connect you with mentors and legal resources to choose and register the right structure for your goals.<\/span><\/p>\n

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Photo by RDNE<\/em><\/figcaption><\/figure>\n\n\n

2. The Patent Process<\/b><\/h4>\n

For ASU Researchers and Faculty: Work with Skysong Innovations<\/strong><\/p>\n

If your innovation was developed with university support, ASU retains certain IP rights. In these cases, faculty, staff and students must disclose their invention to Skysong Innovations, the university\u2019s exclusive technology transfer and IP management office.<\/span><\/p>\n

Skysong has a five-step commercialization process:<\/span><\/p>\n

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  1. Invention Disclosure<\/b> \u2013 Complete an online form (ASURITE login required) before public disclosure.<\/span><\/li>\n
  2. Technology Evaluation<\/b> \u2013 Skysong evaluates the market and IP potential.<\/span><\/li>\n
  3. Marketing<\/b> \u2013 They connect with potential licensees.<\/span><\/li>\n
  4. IP Protection<\/b> \u2013 Skysong pays the legal fees and manages patent filings.<\/span><\/li>\n
  5. Licensing<\/b> \u2013 If a licensee is found, Skysong negotiates and oversees the agreement.<\/span><\/li>\n<\/ol>\n

    Skysong generally does not file foreign patents unless there is a viable market or licensee. Faculty members are not responsible for patent costs unless otherwise negotiated.<\/span><\/p>\n

    The General Patent ProcessWhether filing with Skysong or independently, here are key terms and processes to know:<\/span><\/p>\n