Objective
The initiative is designed to equip Bentley community members with essential knowledge, including answers to fundamental questions, and access to legal expertise that they can draw upon as they pursue and build their entrepreneurial ventures while maintaining compliance with university constraints and legal boundaries.
Purpose
This page serves as a resource for students seeking guidance on entrepreneurship-related legal issues. This includes access to resources, information sessions, and help from external professional legel counsel for specific legal tasks. With these resources, information sessions and help from external counsel, the E-Hub empowers students to make informed decisions without offering direct legal advice.
Prepare and Participate
Student teams developing their start-up ventures need to appreciate that each start-up venture must deal with a number of legal considerations. While it is tempting to "leave it to the lawyers," as an entrepreneur, the student teams should (a) understand key issues as they navigate the legal landscape, (b) prepare themselves to ask the right questions to ensure smooth operations, and (c) know when and how to seek help from legal experts for complex issues. The sections below help the student teams to prepare for these.
Navigating the legal landscape
For a student team developing a start-up venture, it is important to establish a legal entity and a structure for liability protection, taxation, and operational clarity. Examples of legal structures include: Sole proprietorship, partnership, LLC, corporation (C-corp, S-corp), nonprofit. Each has strengths and problems. The table points to possibilities, and key questions that a student team will need to explore.
| Type of Start-up Venture | Legal Entity Types to consider | Key Questions to explore |
|---|---|---|
| Innovation-Driven Enterprise | LLC, C-Corp (preferred for VC funding) | What entity is required for equity financing? How does this structure affect future funding? |
| Small/Lifestyle Business | Sole Proprietorship, LLC | How can I protect my personal assets from business liabilities? |
| Family Business Diversification | LLC, S-Corp, Partnership | How do we formalize roles and revenue-sharing among family members? |
| Side Hustle | Sole Proprietorship, LLC | Do I need an entity, or can I operate as an individual? |
| Creative Industry Venture | LLC, Partnership | What is the best structure for sharing IP ownership among collaborators? |
| Mission-Driven Organization | Nonprofit, B-Corp, LLC | Should I incorporate as a nonprofit or a for-profit with a social mission? |
For a student team developing a start-up venture, meeting tax obligations and adhering to industry-specific regulations is critically important. This can include Federal, state, and local taxes, sales tax collection, payroll taxes, licensing and acquiring certifications and status necessary to operate the business in different jurisdictions.
| Type of Start-up Venture | Tax Issues to consider | Key Questions to explore |
|---|---|---|
| Innovation-Driven Enterprise | R&D Tax Credits, State Incentives | Are we eligible for R&D tax credits or other incentives? Do we have proper payroll tax systems for employees? |
| Small/Lifestyle Business | Sales Tax, Local Licenses | What licenses or permits are required to operate locally? Do I need to charge sales tax? |
| Family Business Diversification | Succession Planning, Tax Strategy | How can we minimize tax burdens for future generations? |
| Side Hustle | Self-Employment Tax | How do I report earnings on my personal tax return? Do I need a business tax ID? |
| Creative Industry Venture | Royalties, Copyright Compliance | Are royalties taxable? How do I handle taxes on collaborative projects? |
| Mission-Driven Organization | Tax-Exempt Status, Donations | How do we apply for 501(c)(3) status? Are grants or donations taxable? |
For a student team developing a start-up venture, it is important to explore how they can safeguard unique ideas, products, and branding. There is a rich legal landscape that describes what copyrights, patents, trademarks, trade secrets are, how they are different, when to consider one versus another, and strategies to protect these.
| Type of Start-up Venture | IP Issues to consider | Key Questions to explore |
|---|---|---|
| Innovation-Driven Enterprise | Patents, Trade Secrets | Do we need a patent for our technology? How do we protect our proprietary algorithms? |
| Small/Lifestyle Business | Branding, Trade Secrets | Should I trademark my brand name or logo? How do I prevent employees from sharing recipes or customer lists? |
| Family Business Diversification | Trademark, Copyright | Who owns the family business name or logo if we diversify into new industries? |
| Side Hustle | Copyright | Do I need copyright protection for my blog, designs, or music? |
| Creative Industry Venture | Copyright, Royalties | How do I ensure collaborators share ownership of a project? How do I license my work? |
| Mission-Driven Organization | Trademark, Copyright | How do we protect our brand while allowing nonprofits to use our name? |
Student teams developing a start-up venture must have the requisite knowledge of how to structure business relationships, clarify roles, responsibilities, and expectations, and establish expectations. Examples include employment contracts, vendor agreements, shareholder agreements and many others.
| Type of Start-up Venture | Contract Issues to consider | Key Questions to explore |
|---|---|---|
| Innovation-Driven Enterprise | Equity Agreements, Investor Terms | How do we structure term sheets with investors? How do we allocate equity among co-founders? |
| Small/Lifestyle Business | Vendor Contracts, Leasing | What clauses should I include in vendor agreements to protect my business? How do I negotiate favorable lease terms? |
| Family Business Diversification | Operating Agreements, Succession Plans | How do we draft agreements to prevent family disputes? How do we ensure fair division of profits? |
| Side Hustle | Client Agreements, NDAs | Do I need client agreements for freelance work? Should I use NDAs with collaborators? |
| Creative Industry Venture | Collaboration Agreements, Licensing | How do I structure royalty-sharing agreements? What happens if a collaborator leaves the project? |
| Mission-Driven Organization | Grant Agreements, Partnership MOUs | How do we draft agreements with donors or partner organizations? |
Student teams developing a start-up venture will need to explore complex issues that include complying with regulations around hiring, managing employees, workplace practices, employee classifications, benefits, discrimination laws, as well as overlaps with decisions related to equity and stock options.
| Business Type | Payroll Issues to consider | Key Questions to explore |
|---|---|---|
| Innovation-Driven Enterprise | Employee Contracts, Stock Options | Should employees receive equity or stock options? Are we correctly classifying workers as employees vs contractors? |
| Small/Lifestyle Business | Payroll Compliance | How do I set up payroll and handle employment taxes? What are my obligations for part-time employees? |
| Family Business Diversification | Family Roles, Worker Classification | How do we separate family member roles from other employees? How do we avoid legal risks in family employment? |
| Side Hustle | Independent Contractor Compliance | Am I legally required to offer benefits to contractors? |
| Creative Industry Venture | Freelance Contracts | How do we define ownership of work created by contractors or collaborators? |
| Mission-Driven Organization | Volunteer vs Employee Classification | Are volunteers legally considered employees in certain situations? |
Student teams developing start-up ventures are acutely aware that they will need multiple fundraising rounds across several stages of business growth. This will require the students to understand how to structure investment deals and comply with securities laws. These may seem like distant concerns for a start-up venture in the early stages. However, it is useful to understand these concerns, become aware of possibilities and terms such as equity vs debt, term sheets, crowdfunding compliance and many more. See also Exploring Funding.
| Type of Start-up Venture | Fundraising Issues to consider | Key Questions to explore |
|---|---|---|
| Innovation-Driven Enterprise | VC Term Sheets, Convertible Notes | What rights do investors have? How do convertible notes or SAFEs work? |
| Small/Lifestyle Business | Small Loans, Crowdfunding | Do I need legal help for structuring a crowdfunding campaign? How do I comply with loan agreements? |
| Family Business Diversification | Family Investment Terms | How do we structure investments within the family without causing disputes? |
| Side Hustle | Crowdfunding Compliance | Do I need to file with the SEC for equity crowdfunding? |
| Creative Industry Venture | Licensing, Revenue Sharing | How do we structure royalty advances with investors or partners? |
| Mission-Driven Organization | Grant Compliance, Impact Investment | Are donations taxable if the organization isn’t a nonprofit? How do we structure impact investment deals? |
The student teams developing start-up ventures will also need to ensure compliance with laws specific to the industry in which they are building their venture. These considerations can be very different for industries such as healthcare (and this can itself be different for wellness products, pharmaceuticals and drugs, medical devices and many more), technology (privacy and security concerns and many more) as well as broader concerns such as safety, environmental laws, or creative licensing.
| Type of Start-up Venture | Compliance Issues to consider | Key Questions to explore |
|---|---|---|
| Innovation-Driven Enterprise | FDA, HIPAA, or Data Privacy | Does our product need FDA approval? Are we GDPR or CCPA compliant? |
| Small/Lifestyle Business | Health Inspections, Local Permits | Do I need health department approval? What permits are required in my city? |
| Family Business Diversification | Licensing for New Ventures | What licensing is required if we expand into a new industry? |
| Side Hustle | Home Business Rules | Are there zoning restrictions for operating out of my home? |
| Creative Industry Venture | Copyright Law, Fair Use | Are we properly licensing third-party materials? How do we handle copyright disputes? |
| Mission-Driven Organization | Philanthropic Compliance | Are there reporting requirements for donations or grants? |
How the E-Hub Provides Assistance
During the year, the E-Hub will host two Information Sessions led by external legal counsel, including Bentley alumni and friends of Bentley. These information sessions will offer general information and guidance on common legal issues faced by entrepreneurs. These include alternatives for business entities, processes for business entity formation, understanding and registering with regulatory and tax authorities, developing contracts for vendors and employees, understanding different forms of intellectual property, developing strategies for protecting intellectual property, building plans for protecting equity interests of founders and co-founders and more. These information sessions are not intended to provide individual legal advice to any students or student teams.
Watch this space for the upcoming Information Sessions
The E-Hub has compiled a set of external resources and templates for several legal topics that you can draw upon. These include topic such as forming a business or handling intellectual property concerns, and several others. Clicking on these links will redirect you away from the Bentley website. Bentley University does not guarantee the accuracy or applicability of external resources. Please note the Disclaimers as you explore these resources.
<Note - here are some examples of what we need (a) https://www.zenbusiness.com/ , (b) https://www.legalzoom.com/templates and many others - We will need these compiled>
- Massachusetts Secretary of the Commonwealth
- Business Division - provides guidance on registering a business in Massachusetts, filing annual reports, and maintaining compliance.
- Massachusetts Department of Revenue
- Tax Information for Businesses New to Massachusetts -provides checklists, guidance on registration
- Massachusetts Small Business Development Center (MSBDC)
- Services - provides no-cost and confidential business advising, technical assistance, and low-cost training programs to prospective and existing small businesses throughout the Commonwealth
- Mass.gov
- Professional Licenses & Permits - for certain professions, you need a license to practice in Massachusetts. Here you can learn about licensng requirements for the state.
- Starting a Business in Massachusetts -provides a step-by-step guide
- Tax Obligations by Business type
As a member of the Bentley community, you can access a network of external legal counsel for specific legal consultation and tasks. This will consist of specific legal advice and work for your situation from external law firms. Examples may include forming a legal entity, filing a patent and more. This will allow you to access legal expertise but will require payment for services. To ensure that you make use of this external legal counsel, consider accessing the information sessions and the curated resources. If you would like to access the external legal counsel, please reach out to e-hub@bentley.edu with your specific questions.
As an international student or scholar, you face an additional set of considerations if you are interested in pursuing entrepreneurship as a career path. The E-Hub has collaborated with Center for International Students and Scholars (CISS) at Bentley to generate additional resources that would be of help to international students and scholars.
- Resources for International Students pursuing Entrepreneurship (hosted by CISS at Bentley)