Question

What legal issues an entrepreneur must plan to address before the business is up and running?

Answer 1

In the long run, no business is ever free from legal complications that arise from its operations. Entrepreneurship is at the core of economic development for most nations and is one of the key reasons why developed nations have progressed in the ways and manners which they have.

At times, startup owners are not aware of the legal complications and often tend to be immature and start their business without proper research and development.

The end result of this, is that companies fail and are heavily penalized even when their only fault was that they were unaware of the legal complications that arise out of business activities. In this the following are the list of some issues which an entrepreneur must deal with before he sets up his business.

Registration:-

Prior to an entrepreneur coming into existence, requires government clearance of many kinds this can be as simple as property checks, to other tax related issues that arise over a period of time. Registration with the relevant local tax bodies is important and compliance with any property laws is equally mandatory for most organizations that must stay updated with the legal requirements of entering into trade.

Intellectual Property:-

Most Entrepreneurs do not understand intellectual property and their ideas fail because they are easily copied by others and they without having any knowledge fail to understand why this happened.

At times the exact opposite may also happen, when unaware entrepreneurs make mistakes by copying already existing intellectual property and fall into legal trouble.

In this case, it is vital for companies to be aware of their rights and take measures to protect their ideas while making sure, that they do not copy others also.

Trademarks:-

Before setting up the business and being ready for trade, it is important to give name to ones business with the concept of trademarks coming into play.

Trademarks are representative of the business one engages in and have largely affected the way in which brands have risen from dust. The reason why we today can differentiate between goods so easily is the emergence of trademarks which have largely helped business owners in creating an identity.

Knowledge of trademarks prevents the company in copying any other work thus protecting their interests.

Business Structure and Relevant Compliance:-

An entrepreneur can enter a market or industry in many ways such as sole proprietorship, partnership, companies etc. It is important for entrepreneurs to be aware of these structures so that they can enable themselves to be aligned with a strategy which best suits its interests.

Further, each structure requires relevant compliance. For example setting up of a company requires registration and documents such as Memorandum and Article of Association. Further, it is recommended to register partnerships and clearly define the profit distribution for preventing legal issues.

Employee related issues:-

A business is also responsible to the employees and must be aware of legal challenges before setting up the organization. In this it should be aware of the minimum wages of an area and the work ethics to be followed so that it can prevent any long term issues.

Also, as a firm grows it must follow policies that make its relationship with the employees even better. Thus before setting up of business the business owner must be aware of challenges which it may face in this regards from government deductions to other legal obligations towards employees.

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