Top 20 Legal Mistakes Entrepreneurs Make: The Expertise of Antwort Law Consultants. Part 2

For over 8 years, Antwort Law has been helping companies overcome legal, tax, and banking issues, allowing owners to focus solely on their development strategy and scaling success. This is the second part, in which we, the consultants at the international law firm Antwort Law, discuss the most common legal mistakes we encounter among entrepreneurs. You can read the first part here. No business grows without mistakes; how quickly you correct them and move on is far more important.

11) Trademark Not Registered or Incorrectly Registered

The brand exists, marketing is underway, but there are no rights, or the trademark is registered to an individual or the wrong company. While the stakes are low, many put this off, unwilling to waste precious time delving into this topic. However, a competitor may register the trademark earlier, or over time, the business begins to lose its identity and value. However, when scaling and entering new markets, or when conflicts arise, or when the business is being sold, the lack of a trademark can be fatal. Don't put this off; contact us to resolve this issue once and for all.

12) No transfer of exclusive rights from developers/designers/authors

If you don't establish legally sound mechanisms for transferring rights, you won't be able to legally own, license, or sell the product in the future. Again, like most such non-obvious issues, they come to light during crises and conflicts: internal company disputes, the departure of a developer, blackmail of a contractor. We help restore the chain of rights and eliminate gaps.

13) IP is registered to an individual (founder/director/contractor)

Technically, it's always more convenient to register all domains, repositories, advertising accounts, applications, and trademarks in the name of a single person. Typically, this is done at the very beginning and doesn't raise any questions or concerns for any of the partners. However, if unforeseen circumstances arise, such as death, divorce, conflict, sanctions risks, team changes, company sale, or conflict between partners (the list goes on), the business loses control. Remember: key accounts belong to the company/holding, while employees/individuals only have role-based access, not ownership.

14) Lack of licensing terms and compliance for content/software/data

Nowadays, almost no one dares to create a website without special documents such as Offers, Privacy Policies, Cookie Policies, and Return Policies. However, typically, only the most necessary documents are added to the site, and these are not compiled correctly, using neural networks or automated applications. In the future, such a casual approach threatens platform blocking, data fines, consumer lawsuits, and claims from copyright holders. We help build the legal framework for digital products so that they are accepted by banks, platforms, and investors (product legal documents + licenses + data and advertising compliance).

15) Tax Model Errors and "Taxes Later"

Often, a structure is created at the drop of a hat, without thoroughly calculating taxes, VAT, and other parameters. Such initial carelessness can lead to retroactive assessments, fines, transaction blocks, increased costs, and personal liability as turnover increases, tax audits occur, entering a new country, or a new investor arrives. Ideally, a tax model is calculated and developed before the business launches and certainly before scaling, specifically before the start of scaling. This includes the supply chain/services chain, location of sale, VAT, withholdings, and PE. We develop a tax-legal design along with the ownership structure and contractual framework.

16) Incorrect Tax Residence of Directors/Key Persons

A common situation for international businesses: the director lives in one country, manages the company in another, and the funds flow to a third, all without documentation or evidence. During tax audits or thorough banking compliance, such a scheme could lead to management being deemed to be located in the wrong country, leading to claims against the company itself and the director personally. We correctly formalize management, building a management and documentary "trace" that withstands any audit.

17) Ignoring Company Substance Requirements

Substance requirements (company presence in a given country) are becoming more stringent worldwide every year. The practice of a company existing but having no actual operations, office, management, expenses, or personnel, while benefits and "preferences" are claimed, is becoming a thing of the past. During audits, banking compliance, tax inquiries, license renewals, and other procedures where the company is being verified, this situation is revealed and threatens the loss of preferential treatment or tax benefits, tax claims, bank rejections, and the risk of the structure being deemed artificial. We provide the substance of your company as a system: management, office, expenses, contracts, personnel/contractors, flow. We organize the economic functions and set up processes so that the structure is "live" and provable.

18) Lack of logic in intra-group payments (transfers, assignments, documents)

If your company's money is "chugging" between companies rather chaotically: loans without conditions, "marketing" without reports, "services" without results, then sooner or later the lack of economic sense will be noticed by banks and the tax authorities. We bring order to your logistics and payment system—contracts, methods, documents, assignments, compliance package.

19) Documentation chaos and lack of evidence (acts, reports, correspondence, primary documents)

If your documents are not in order and searching for a particular act or invoice takes too much time, this will ultimately lead to some serious error in the documentation. A unified and well-thought-out document management system (checklists, registers, folder structures, templates, and regulations) will not only save you time but also protect you from future problems. We help you bring your documents into legal order.

20) Lack of regular legal audits and preventative maintenance (until urgent)

Business changes faster than documents: new markets, new products, new partners, while the legal framework remains the same, accumulating risks. During scaling, crises, major transactions, tax audits, and bank blocking, these shortcomings will be revealed. You need a corrective plan and implementation oversight. Antwort Law conducts an audit, provides a risk map and roadmap, and supports the implementation as a project.

Antwort Law is an international group of professionals who can resolve even the most complex legal, tax, and banking situations thanks to our extensive consulting experience in the UAE, UK, EU countries, Singapore, Hong Kong, China, and the USA.

Lidia Ivanova

International lawyer
Antwort Law