The next great form of transportation was announced in a June 4, 2019, article from the Los Angeles Times. No, it’s not another rideshare service or a variation on the Bird scooter. Nor is it a more futuristic means of travel like the Jetsons-esque flying cars.
Give up? It’s a pogo stick!
This summer, Swedish startup Cangoroo plans to launch an app-based pogo-stick sharing system. Several cities will be part of the Cangoroo launch, including Malmö and Stockholm in Sweden, and San Francisco, California.
Described as “an effort to support car-free, sustainable and health options for urban commuting,” Cangoroo’s pogo-stick startup is unlike anything on the market. Renters can literally hop their way to and from work, making it possible for 10,000 jumps to become the new 10,000 steps needed for daily exercise.
As a business owner who works with entrepreneurs, I’m mindful of the many “what ifs?” that startups face, good and bad alike. If your business model was based around a pogo stick, you would definitely take the proper precautions to protect your business.
Want to start a business just as creative as Cangoroo, but ensure your safety from the risks involved? Protect your startup from day one by crossing these items off your legal to-do list:
1. Incorporate the startup or form an LLC
Let’s imagine that Cangoroo isn’t already an incorporated business. If I had to recommend an entity to incorporate a pogo-stick startup, I would advise choosing either a limited liability company (LLC) or corporation structure.
These are not the only two legal entities available to startups. Some startups initially incorporate as sole proprietorships. This affordable entity allows entrepreneurs to be the boss where they are in charge and are able to exercise complete control over the company.
However, if a pogo-stick startup was incorporated as a sole proprietorship, the business would not be considered a separate entity. The sole proprietor (AKA the boss) would be liable for anything that happened to the startup. That could be any kind of unforeseen circumstance, from a customer falling off the pogo stick and injuring themselves to part of the pogo stick breaking after a jump. A sole proprietor would be held fully responsible for the injuries and the broken equipment. They may even face a lawsuit.
Incorporating as an LLC or corporation formation, however, provides entrepreneurs with liability protection. This ensures your personal assets remain separate from the business. In the event you were faced with a lawsuit, it would not impact your personal assets like houses or cars, and you would not be held personally responsible.
As a quick side note, do not forget to prepare the appropriate documents for your entity. If you incorporated as an LLC, you’ll need to draft an operating agreement. A written operating agreement establishes how the LLC is conducted and helps protect your limited liability status. Corporations will need bylaws. These are the corporation’s rules and regulations and include information about how each corporate office functions, how meetings are conducted, and the voting formalities of shareholders.