Getting Started with the Legalities
Ideas, business model, seed money, all check. But how do you go about the legalities that you know so little about.
Untiring excitement fills the head as you work on your new venture. Trying to put everything in place is like solving a never-ending puzzle – you add a piece only to find more pieces missing. Absorbed by numerous challenges, you are likely to overlook the legalities. For not knowing where to start, for wanting to take it as it comes, and for thinking legalities are secondary for a business that hasn’t made a penny –whatever the reasons maybe– ignoring legalities can be costly. Here are a few simple suggestions to help you move beyond legal obscurity:
Figure it out before you start the show
Legal issues are not something you should put off for later. You need to plan ahead, do what’s required, and also prepare for not-so-pleasant developments. Some of the most common legalities to take care of are: choosing the right form of business entity, business licenses, supplier and client contracts and employee matters. Besides legal necessities, it is also important to plan for possible legal issues that might come up later.
Find a friend with a legal background
Entrepreneurs are the hardworking-do-it-yourself kind, but when it comes to legal issues it is good to have someone who knows the law. Finding someone good who you can talk to (frankly) about legal issues for your business for free is a great idea. A good lawyer will try to build relationships to venture into prospects and not charge for every meeting.
Contracts do not need sophisticated words
Despite popular belief that contracts need to be filled with legal jargon, it’s a better idea to express clearly and in simple words terms and intent of the parties involved. Identify possible reasons for disagreements and write down terms and conditions to avoid or resolve such disagreements. You don’t need a lawyer to write a legal contract but double checking with a lawyer friend is best.
Write it down
Its not just the contracts that need to be in writing. From salary negotiations to basic agreements, make it a point to write things down. You never know when the burden of proof falls on you in court. Having important aspects of your business relationships in writing can prevent most legal headaches. Besides being useful in court, a habit of writing simplifies work and defines duties and tasks clearly. Having a written agreement draws the scope of your agreements.
Legal cases are not ego battles
It is important to understand the cost effectiveness of legal battles before pursuing one. Legal disputes are not personal, “it’s just business”. As an entrepreneur having to protect your business property and having to interact with other businesses protecting their own interests, legal disputes are common. You need to understand various dispute resolution channels – mediation, negotiation, arbitration and courts.