Legal aspects entrepreneurs forget that can be dangerous to the success of their business
Legal aspects entrepreneurs forget that can be dangerous to the success of their business

Entrepreneurs make a number of business decisions each day which have significant legal implications on the functioning of their business. Due to the complexity of the legal landscape, entrepreneurs make these decisions without understanding the legal implications, which could ultimately affect the success of the business.

Choosing the Correct Business Structure

One of the first steps when starting your business is choosing a business structure to suit the needs of your business. Structures vary from sole proprietorship, partnership, private company, public company, personal liability company, non-profit company and state-owned company, each with their own advantages and disadvantages.  The business structure can be critical to the success of your business as the structure influences everything from day-to-day operations, taxes, the paperwork you need to file and your personal liability.

Protecting your Intellectual Property

Intellectual Property (“IP”) is integral and unique to your business and it can become your most valuable asset. It is therefore important to ensure that your IP is protected.  Intellectual Property includes, but is not limited to, trademarks (your logo, business name, product look and feel) and copyright (your photographs, music, book and software).

Protecting your Intellectual Property can be complex to understand which is why it is advisable to have an experienced and qualified Intellectual Property lawyer assist you with the process, including the registration of your trademark and/or drafting a Copyright Assignment Agreement.

Having  Comprehensive, Written Contracts in Place

A handshake, phone call or Whatsapp conversation is not sufficient to secure and guarantee your agreements with other individuals and/or businesses, in particular you rights and obligations in terms of the agreements. It is advisable to have your agreements in writing and signed by all parties to the agreement. Contracts are necessary to ensure your business is protected and in doing so, contribute to the success of your business.

A proper written contract protects the fundamental aspects of your business and it can provide security and peace of mind to all parties involved in the business transaction.  You may require written contracts with co-founders, employees, suppliers, clients, service providers or affiliates.

Fulfilling Legal Obligations

When starting your business, it is important to ensure you comply with all necessary legal and commercial obligations. These obligations include, without limitation, tax obligations, VAT, PAYE, Unemployment Insurance Fund, insurance, medical aid schemes. It is important to be aware of the legal and commercial obligations from the outset in order to avoid liability.

Your Staff

If you have employees or contractors, it is important to comply with employment laws. You will require contracts as well as company policies. The contracts will deal with aspects such as duties and responsibilities, leave, termination of employment, length of appointment, restraint of trade and confidentiality. Without clear written contracts regarding the employee’s or independent contractor’s rights and responsibilities, the relationships may easily break down and lead to expensive disputes that could have easily been avoided.

Key Takeaways

Legal compliance plays a crucial role in the success of a business. The legal landscape can, however, be difficult and confusing to understand. It is best to approach a professional to assist you with the legal components of your business.

Our lawyers are experts in commercial and business/corporate law with a thorough understanding of the legislation pertaining to companies. If you would like a consultation to discuss your options going forward, you can schedule a free, no obligations consultation.

Written by: Accelerate Legal Solutions
January 25, 2022