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Startup: Why Is Drafting Legal Statutes a Mandatory Step?

by Stan Minh

When you decide to start a business, you will need to follow specific steps. After having thought of the legal form most appropriate for your start-up and made a choice, it will be necessary to build a file of creation. The most complex part is often the drafting of statutes which worries many entrepreneurs. In this article, we inform you about the nature of these statutes and how to write them. 

What are the statutes and why are they so important?  

The statutes are a set of rules that define the operation of the start-up or company. They must indicate the legal name, the legal form, the address of the registered office, the contributions of each partner or shareholder, the amount of the share capital, the object (that is, a brief statement of the activities carried on and operations carried on by the corporation), and the life of the corporation. 

Additional information must be included in the articles of association, in particular on the company’s operating procedures (identification, composition, rules for the decision-making of the company’s main bodies, in particular management, and control: members of the board of directors, the functioning of the management/presidency, majority rules at general meetings, etc…). 

The articles of association thus appear as a contract of partnership. They are the very basis of the operation of startups and each shareholder must act in accordance with its terms. Therefore, it is important not to underestimate anything during the drafting of the statutes. And this is especially because, although they can be modified, their modification can lead to a heavy formalism and a considerable cost. 

How can a startup’s statuses be drafted?  

When creating a startup, the drafting of legal statutes can be done in two ways. The entrepreneur may entrust it to a professional or do it himself.  

Hiring a professional  

This involves calling on a lawyer, a public accountant or a notary (in the case of notarized statutes, the statutes must indicate the name and address of the notary) to draft the statutes of your startup. This approach is very appropriate in the context of business creation in that it offers the entrepreneur many advantages.  

Indeed, the professional guarantees companies perfect writing, in line with their aspirations. Experienced in the field of law, he or she will be able to put in place the various clauses necessary for the proper functioning of the company and thus allow its sustainability.  

In addition, the start-up’s partners, thus relieved of this task, will have free time to devote themselves to other projects or other tasks, pending the establishment of the statutes.  

The only downside here is the price of this service. It usually takes between 800 and 5,000 dollars (depending on the project and the country) to draft the statutes by a professional. This is often seen as a significant cost, especially at the beginning of a start-up.  

Of course, it is not impossible to find cheaper writing services. However, it is important to be vigilant because, often, behind attractive offers and very low prices may hide an incompetent professional or one who is offering poor quality services.  

Drafting the statuses yourself  

This option has the advantage of being free of cost. Here, you do not need the drafting services of a professional and, thus, save the hiring budget.  

In this case, to succeed in drafting its statutes, it is necessary to use various tricks, of which the best known is the exploitation of models. Most of the time, when the founder of a startup decides to write his statutes, he relies on various free and exploitable models that he finds on the Internet.  

Caution should be exercised in using a model proposed by a recognized site or ideally trying to find a status model established by a professional. 

To secure his approach, it is preferable to ask a professional, in order to be advised on the drafting of the statutes, learn about the various texts of law, or to proofread, for the sake of ensuring that the content that is being put in place complies with current legislation. 

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