Unit III Legal Challenges In Setting Up Business For New Venture Planning Bcom Sem 1 Delhi University Notes

Unit III Legal Challenges In Setting Up Business For New Venture Planning Bcom Sem 1 Delhi University : Setting up a business is an exciting time but without the right legal advice it can also be a legal minefield. Prevention is better than cure. A specialised business solicitor can help you identify future legal problems and advise you on what steps to take to prevent problems before they happen, which will protect your business from risk and save you money.

Unit III Legal Challenges In Setting Up Business For New Venture Planning Bcom Sem 1 Delhi University Notes

Unit III Legal Challenges In Setting Up Business For New Venture Planning Bcom Sem 1 Delhi University : Attending to important legal aspects of a business can often be overlooked by entrepreneurs caught in the excitement of launching a new start up. As a lawyer representing such a client, it is vital to redirect attention to identifying and prioritizing the legal issues that are most pressing and in need of immediate action.

Download here Unit III Legal Challenges In Setting Up Business For New Venture Planning Bcom Semester 1 Delhi University Notes in pdf format 

Unit III Legal Challenges In Setting Up Business For New Venture Planning Bcom Sem 1 Delhi University :

1. BUSINESS BASICS

One of the first legal decisions you will likely make pertains to the legal structure of your business. The decision as to whether to set up your business as a sole proprietorship, partnership or corporation depends on your specific needs and circumstances. The many variables may include the type or nature of your business, your personal risk tolerance, financial and funding factors, the scope and scale of the business, and future considerations, among others.
Different business structures are governed by separate legislation that have unique requirements. Sole proprietorship and partnerships have similar advantages and are a lot simpler to set up. Both incur relatively low registration costs and are easier to maintain. However, the most noteworthy disadvantage is the unlimited liability you as an individual will face. Incorporating your business, either provincially or federally, resolves the unlimited liability issue to some extent, though it costs more and involves more paperwork and maintenance.
In time, it may be necessary to change the structure of your business due to expansion and growth, or due to the addition of a new partner or a new investor.

2. WHAT’S IN A NAME?

It is important to take the time to research and choose the right name for your business and the right trademark for the services provided or the products sold. After all, it’s all about identity, branding and differentiating your business from your competitors. While the registration of business names/corporate names and trademarks are governed by different rules, the name/trademark legal issues are often intertwined. It is upsetting and frustrating for a business owner who has incorporated a company under a name to later discover that the same name cannot be used as a trademark due to the existence of a prior identical or similar trademark on the Trademarks Register. The mistaken assumption is that incorporation under a particular name implies the right to use the same name as a trademark.

3. PROTECTING YOUR INTELLECTUAL PROPERTY

There are different types of IP rights, namely, trademarks, copyright, design and patent rights. Depending on the nature of your business, certain IP rights may be more relevant than others. For instance, Amazon is not just part of the corporate name of Amazon Technologies Inc., it is also the invaluable trademark of the e-commerce giant. Amazon owns some very interesting patents, including a recent U.S. patent for an “Airborne Fulfillment Center” or what some are calling, “a giant flying warehouse”, that deploys drones for delivery services.

IP ownership should not be viewed solely from the perspective of establishing your rights. It can also provide opportunities for exploitation of these rights, such as through licensing, franchising and potentially, the opportunity to sell or assign your IP rights.

If you have your sights set on the international market, it is important to take steps to protect your rights internationally.

4. LICENSES, PERMITS AND INSURANCE

Find out what regulations govern your type of business and what licences and/or permits are required from this useful site. The Canadian Anti-Spam law prohibits businesses from doing certain unsolicited activities online, such as the sending of unsolicited commercial electronic messages without obtaining the recipient’s consent. There are privacy laws that businesses have to pay attention to regarding the collection and use of personal information in the course of commercial activities. For some businesses, having the appropriate insurance in place is strongly recommended. For instance, for food vendors (whether a food truck or a farmer’s market stall), protecting against potential food mishandling and sanitation claims is of paramount importance.

5. RELATIONSHIP WITH STAKEHOLDERS

Unit III Legal Challenges In Setting Up Business For New Venture Planning Bcom Sem 1 Delhi University  -In the course of running your business, you will be working with various people such as suppliers, distributors, dealers, service providers, payment providers, web designers, software developers, social media consultants, and legal and financial advisers. Within your organization, you will have business partners, funders, investors, employees and contractors. Most importantly, you will need customers, clients, subscribers or users. Ensuring that the parties understand their respective roles, obligations and responsibilities will be crucial for the success of your business. Having the proper contracts to govern these relationships, where the scope of work is properly defined, and the rights and obligations of the parties are clearly set out, will avoid misunderstanding and conflicts down the road.
The above is by no means an exhaustive list but perhaps a good starting point when looking to identify potential legal issues that your business may face.

Unit III Legal Challenges In Setting Up Business For New Venture Planning Bcom Sem 1 Delhi University Notes

Unit III Legal Challenges In Setting Up Business For New Venture Planning Bcom Sem 1 Delhi University : Starting a company means lots of surprises, but a lawsuit shouldn’t be one. Successful young entrepreneurs explain what they wish they knew about the law when starting up.

The Young Entrepreneur Council asked 14 successful young entrepreneurs about which unforeseen legal issues pop up while starting up. Here are their best answers.

Unit III Legal Challenges In Setting Up Business For New Venture Planning Bcom Sem 1 Delhi University :

1. Watch Out for Your Advice

When I first started speaking professionally and coaching individuals, I never thought that I needed special insurance. It is rare, but I have seen some people take advantage of well-intended “advice” by claiming it destroyed their life and then suing the communicator. If you are in the business of providing advice, look into getting some liability insurance.

2. Consider Vesting Your Equity Over Time

It is extremely difficult to find the right co-founders for your business. You need to have a similar work ethic and timeline for the investment, your chemistry has to match, and you have to make sound decisions for the company. Instead of getting all of your shares at once, consider vesting your equity over time so you have a fair solution if these factors do not line up, as is often the case.

3. Get Protection From Deadbeat Clients

I wish I’d had an ironclad contract that allowed me legal recourse against a client who refused to pay. I never realized that so many people use your products and services, and then just walk away. Now, my contract states that I can go after them for the money owed and any associated legal costs.
4. Beware the Costs of Hiring Contractors

We started Modify with one employee and a litany of contractors. This seemed like a “cheap” way to grow–we had few payroll taxes and few benefits. However, the definition of a contractor is quite strict. A company loses “behavioral control” with contractors; you cannot set fixed hours or define the role with granularity. Mis-classifying employees creates significant risk for a business.

5. Establish a Buy-Sell Agreement

What happens when one of the partners wants to exit? What do they get, and under what terms? What happens if a partner gets hit by a bus? If their ownership interest goes to a spouse, does the spouse have a say in management decisions? Uncomfortable questions, but it’s much easier to address these up front than it is when you’re making lots of money. Get it on paper in the beginning.

6. Limit the Company Transparency

When incorporating your business, some states like Delaware keep your LLC information private, while others do not. If you have a large platform with a customer service aspect, its important people are not call your cell phone with issues, you must design the operations to encompass all related services. Keep your information safe, especially when scaling your platform.

7. Harness the Power of Documentation

Documentation is essential. Taking the time to get your paperwork in order ahead of time pays off big as your company grows, so make sure that you get all of your initial legal work correctly pulled together. This includes offer letters, confidentiality agreements, option agreements and, most importantly, your initial customer contracts.

8. Take Notice of Trademarks

Don’t get two years into your business and then find that you have to change the name of a popular product or even your entire company because someone has just realized that you’re using a variant of their name and wants to sue you. It happened to us and at least three others that I know. Do your homework (most can be done online) and get a trademark before you start rolling with it.

9. Prepare for Employee Issues

Inevitably, some of your most favorite employees today will not always work out in the long run. Be sure to you have well-written offer letters with non-competes, mutual agreement to arbitrate clauses, and other protective addendums. Keep counter-signed copies on file and formally document reviews and disciplinary write-ups. Diligence upfront will save you a lot of time and money in the future.

10. Keep Up With the Contracts

I wish I had realized the importance of having contracts with my vendors, clients and employees. Initially, I made deals on a handshake, and although this never led to any serious legal problems, it did make for plenty of headaches. You need to have something in writing to outline terms and conditions. This protects both you and the person or company with whom you are working.

Unit III Legal Challenges In Setting Up Business For New Venture Planning Bcom Sem 1 Delhi University Notes