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Corporate Formation and Structuring

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Corporate Formation and Structuring

Legal Guidance for Strategic Corporate Formation & Structuring

If you’re building a technology-based startup, you already know the road ahead won’t be short or simple. 

Before product approval, before revenue generation and long before profitability, you’ll make decisions that shape your company’s future. One of the most important is your company structure. In this section, we’ll deal with the corporate form since it is the one most used by companies seeking outside investment.  At Crowley Law LLC, we’ve worked alongside life sciences and other technology startups to handle the early legal decisions that matter most.

From business formation to founders’ agreements, we help founders protect their intellectual property (“IP”), reduce regulatory risk and approach venture capital firms and Angel investors with confidence.

Attorney's hands holding a large stack of legal documents for corporate formation and business structuring

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Why Corporate Formation and Structuring Matters

Some of the costliest mistakes in corporate law are made during business formation and only discovered much later when fixing them can be very costly – if possible at all.

For example, founders may fail to require each other to assign to the startup all of the trade secrets and other relevant IP that they own. If one or more founders leave without proper founders’ agreements in place, the company may lose access to the IP required to continue operations.  Or the company may be left with only a license of some sort to use the IP without any assurance that it won’t be licensed to one or more competitors.

Also, if there’s a dispute among the founders without some sort of dispute resolution mechanism in place, the dispute could become the center of attention and distract the founders and employees from the task of driving the business forward.  That can result in slower growth, no growth or ultimately failure of the enterprise as conflict among founders replaces productive activity.  We’ve even seen cases where unchecked emotion has caused individuals to act against their own best interests.

Further, it’s important for the founders to consider up front what would happen if a founder were to stop participating and just hold his or her stock.  The founders need a fair way to apportion equity interests based on work in the venture, even if the equity interests start out as equal for each founder.  That calls for a vesting plan for equity so that earning of equity is tied to effort in the business.

That’s why we encourage biotech founders to treat corporate structuring and the agreements that surround it as a strategic asset, not a box to check. Our legal services help startups form legal entities and related governance structures that hold up under scrutiny, support clean fundraising rounds and maintain control over IP through future growth and change.

Our Corporate Services

As experienced corporate lawyers, we work closely with founders to build structures that reflect their goals and anticipate what investors, regulators and collaborators will expect down the line.

Bylaws and Certificates of Incorporation

Bylaws and Certificates of Incorporation lay the groundwork for how your corporation will operate. We work with founders to draft clear, durable documents that support clean ownership, regulatory compliance and smart decision-making right from the start.

Stockholders’ Agreements

When a company has multiple stockholders, it’s important to govern how the stock can be held, transferred and, in some cases, repurchased by the company.   We work with clients to put in place stockholder arrangements that cover equity, control and dispute resolution — so your business entity remains focused and stable.

Collaboration Agreements

Technology-based startups often team up with research institutions, academic labs or other companies to advance shared goals. These collaborations can unlock new funding sources, expand technical capabilities and accelerate product development. But without a formal agreement, they can also introduce confusion, risk and conflict. We help startups draft clear, enforceable collaboration agreements that define each party’s roles, protect intellectual property and minimize the risk of legal disputes.

Confidentiality Agreements

Trade secrets, unpublished data and early-stage results all need protection. We help biotech startups create strong confidentiality agreements that safeguard their value and demonstrate to investors that internal controls are in place from the start.

Intellectual Property Assignment Agreements

Without clear assignment agreements, IP created by founders, employees, consultants or contractors may not legally belong to the company. We help biotech startups formalize ownership through strong, well-structured agreements that are essential for investor due diligence and long-term intellectual property protection.

Investment Agreements

Investment agreements define how capital enters your company and under what conditions. We help startups negotiate agreements that can protect founder control, address intellectual property rights and support future exits, so equity funding doesn’t come at the cost of long-term flexibility or ownership.

Why Work With Crowley Law LLC

With over 30 years of experience, we’ve seen how early legal decisions shape what a startup company can do later, whether that’s raising venture capital, entering a strategic partnership or preparing for acquisition. We help founders choose the right business entity, draft enforceable agreements and build business structures that support long-term growth. Contact us at 908-738-9398.

What our Clients Say

As someone that both teaches, invests in, and builds startups, trust me when I say From Lab to Patient, Garage to Market is must listen. My plan was to listen to just an episode or two but I ended up binging the whole catalog. The binge-able 30 minute episodes    are packed with depth that you cannot get elsewhere. Every episode has value but some of my favorite episodes are his immigration law for the tech industry and his tax and accounting essentials, which are must-listens.

Phillip Crowley’s podcast is a rare blend of intelligence, heart, and practical wisdom. He has built a podcast that brings out the best in his guests and leaves listeners with actionable insight. You will not be disappointed – you’ll be empowered!

– Mark Annett, JD MS BME, Patent Agent #69401

Mark Annett, JD MS BME, Patent Agent #69401

Real Voices, Real Results

“I’ve been working with Phil for a very long time; it’s been a great experience working with him.
He restructured the company altogether from the get-go. He’s astounding. He comes at law from
a very detailed perspective and a very business-oriented perspective I hadn’t encountered before.
[A] focus on taxes and exit strategies is an obvious thing for a startup company to think through,
but it was not obvious to me that we would be thinking about these things this early on. He’s just
a really good attorney.”

Chris Marshall – CEO of Research Stage Biotech Company

A Gateway to U.S. Growth Eisner Advisory Group

“As a partner of the Eisner Advisory Group, I’m firmly committed to helping international life
sciences and technology companies expand their operations into the U.S. Through our “Coming
to America” program, we help these entities fulfill their entrepreneurial journey — from assisting
them in professionalizing and growing their U.S. business to serving as a sounding board when
things don’t go as initially planned. Our goal is to provide them with the comfort of knowing they
are supported through whatever compliance elements or logistical needs arise on that journey.
“Because many of these companies don’t have a U.S. attorney, we readily refer them to Crowley
Law. We’ve enjoyed a great relationship with Phil’s firm, which is entrepreneur-friendly and has
done a fantastic job helping our clients set up their initial companies, put employment agreements
in place, enter into leases for offices and perform many other critical tasks. Crowley Law gets
things done quickly while understanding the needs of technology-driven companies. Most
importantly, Phil always takes time to listen. His level of care helps all boats rise with the tide, and
I always refer him with great confidence.”

John Pennett – Partner International Consulting and Accounting Firm

John Pennett – Partner International Consulting and Accounting Firm

Words on a Reciprocal Relationship

“As attorneys, our reputation is one of our primary assets, so we must have a trustworthy referral
network. Crowley Law LLC has been a go-to referral firm for nearly a decade and remains a
tremendous resource. Phil is so tapped into the industry and has such great experience that we
know our clients will always be in good hands. Even when a client’s request falls outside Crowley
Law LLC’s direct services, Philip’s extensive network of contacts ensures that clients will be
directed to the most appropriate resources to fulfill their needs. “I once had a friend from grad
school — who is a very successful academic scientist and leader in his field — contact me for
advice after he developed a compound with therapeutic potential and sought to form a company.
The first thing I said was, ‘Call Phil Crowley!’ Phil was able to assist him in advancing his
academic work into a company and potential commercial endeavor. Phil’s expertise, guidance and
support put him in the best position to succeed. “Phil is a solid, forward-thinking person who
strives to do the right thing. I’m always comfortable and confident referring my clients to him.”

Anne-Marie Yvon, Partner in Biotech Focused Intellectual Property Law Firm – Grimes & Yvon LLP

Phil brings decades of big company executive experience combined with an entrepreneurial ability to think outside the box.

– Tom Scholl, Entrepreneur, Technology Innovator and Investor, Professional Venture Capitalist

Tom Scholl, Entrepreneur, Technology Innovator and Investor, Professional Venture Capitalist Recommends Philip P. Crowley

Phil responded to me quickly, identifying a variety of risk scenarios to consider and he turned over his recommended red-lined contract in a matter of hours. Ever since then, I rely on him as a consummate legal resource and trusted advisor.

– Leigh Ann Soltysiak, Silverleaf Consulting, Commercialization Strategy Consultant, Consumer Tech & Health Wellness

Leigh Ann Soltysiak, Silverleaf Consulting, Commercialization Strategy Consultant, Consumer Tech & Health Wellness Recommends Philip P. Crowley

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FAQ’S
When Is the Right Time to Formally Incorporate My Biotech or Tech Startup?

Sooner is better than later.  Creating a limited liability entity helps to isolate business-related liabilities to the company.  It also provides a repository for the IP the company needs and uses. If you’re applying for Small Business Innovation Research grants or partnering with universities, having a formal entity is often required. The sooner you lock that down, the stronger your legal position.

It really depends on your short-term and long-term plans. If you’re bootstrapping, not raising money soon and keeping operations lean, an entity that can pass through losses as personal deductions by founders may be beneficial.  As the company shifts toward raising significant outside capital, a structure that isolates profits and losses at the company level may be required—since experienced investors typically don’t want to have other operations affected by the pass-through of losses from their investments.  The best structure depends on where your business is headed—not just where it is today.

The most protective situation would be for founders to formalize their relationships with the company and each other through Stockholders’ Agreements and Founders’ Agreements that spell out the expectations of the founders on equity ownership, decision-making power and what happens if someone leaves. Experienced investors frequently ask to have arrangements like this in place before funding.

Helpful Resources

Practice Areas

Contract Review & Negotiations
Capital Raises & Financing
Licensing Agreements & Strategic Collaborations
Mitigating Business and Legal risks
Intellectual Property Planning & Protections
Strategic Planning
General Counsel Services
Complex Business & Commercial Litigation