Legal Issues & Red Tape
November 19, 2015
Understanding the business rules, codes of practice, laws, legalities and regulations when starting a new business is extremely important to ensure you avoid any legal problems in the future. From health and safety rules to employee laws and software licensing, the information found in this section of Startups.com.sg will help you make sure you are meeting all the necessary legal requirements of your brand new business.
- Advertising & Marketing Law
- Dealing with Legal issues
- Health & Safety Regulations
- Intellectual Property Law
- Licensing Privacy law
- Tax Law
Legal issues behind starting and running a small business
Starting a small business is becoming a popular and lucrative venture for people from any trade, industry or background. Record numbers of new companies are being started up around the South-East Asia and Singapore in particular. With more and more legislation aimed at making life easier for business, and particularly small business, it would seem that this ‘golden age’ of entrepreneurship looks set to continue into the future.
The first major legal decision any entrepreneur faces is in deciding the legal format and business type for the new enterprise. Sole trader, partnership or limited company are the main options, although social enterprises and limited liability partnerships are also available for certain types of companies and businesses.
The benefits and legal burdens vary largely for whichever type of business you decide to peruse. Sole tradership is the easiest, quickest and cheapest, but offers virtually no tax advantages and places the 100% liability on the business owner. Company registration limits your liability, but has some associated costs and legal obligations that should be considered. This is nothing new but is always worth noting.
Once you have identified your ideal trading format, there will be a number of additional legal hurdles, which will vary depending on the type of business you are setting up and the scale of your venture.
Acquiring the appropriate commercial premises for your new business is one of the early crucial steps for many small business owners, and this comes with the need for professional legal advice when negotiating the lease, not least to ensure that as a start-up company you have the necessary protection if things don’t quite go to plan from the beginning. Your lawyer will be able help you avoid surprising contracts in the lease, and should get you a favourable early break clause so you have a way out.
Many small businesses require financial assistance in the early stages of development, particularly start-up capital, most often in the form of private investors or a loan from a bank or financial institution. Once again your lawyer should be involved in this process. Negotiating terms with banks may seem like a fruitless task in the current economic climate, but going into any financial agreement fully aware of the legal implications is certainly the best course of action, and should be an aim of any start up owner.
One of the other crucial legal hurdles is the issue of staffing. Legislation in this area is moving all the time, so getting good legal advice early will pay-off in the long term. You need to be aware that employees acquire a range of legal rights from the beginning (like the right to a pay slip, an employment contract and the right not to be discriminated against). Ensuring your business gets this correct is vital, as employment tribunal claims can completely derail a start up company.