When an entrepreneur decides it is time to start a business, one of the last things he takes into consideration is the one related to the legal problems that may arise along the way. Such problems may eventually become a major stumbling block for your business, or even leave you out of it.
Among all the legal errors that an entrepreneur can commit, there are some that deserve to be cited in order to put into perspective the importance of having the advice of a business lawyer from the very beginning of the project.
Errors that an entrepreneur can commit
Lack of an adequate legal structure
The first mistake, which is more common than one might suppose, is the lack of an adequate legal structure. This is the first of the serious errors that an entrepreneur can commit. Stoked by the enthusiasm of starting operations, an entrepreneur launches a business without considering the numerous problems that might arise. The most common problems involve a demand from a client or an employee.
It may also happen that at some point in time, the entrepreneur will need to add an external investor, and he will not be able to do so due to the lack of an adequate legal framework. Plus, in the first two cases, not having an adequate legal structure can expose him to personal responsibility.
Regarding external investors, we know that they are very important at some point in the business’s history, since they provide cash flow in times of difficulties. However, once the investor enters the business, it is very common to see disagreements about how to run the company. If these differences are not resolved, investors can start to threaten legal action.
Whenever an external investor integrates its capital, it must do so under very clear rules with written documentation that foresees these types of contingencies. No matter how much trust there is between an entrepreneur and an investor, when the business does not work, any small difference becomes an insurmountable obstacle. A business lawyer will know how to anticipate these problems, giving a legal framework for any dispute process between associates.
Inadequate protection of customer data
Another problem encountered by companies that begin doing business through the Internet is inadequate protection of customer data. Small companies with limited budgets are vulnerable to attack by hackers, which place not only the stability of their website at risk but also the confidential data of clients. A business lawyer with experience in ecommerce will know how to help you prevent this situation and protect yourself against this type of problem.
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Here, we have pointed out just three possible legal problems that may affect a company. The list is much longer and most entrepreneurs will not be aware of them. Only with the proper advice of a business lawyer can you enjoy growing your business without being consumed in matters not previously anticipated.