Every human society is guided by laws that regulate the activities of individuals and institutions in it. Generally, without laws and obedience to those laws, there would be anarchy and, as such, it is in the best interest of the members of the society that laws are strictly adhered to.
The legal system
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In today’s civilised world, there are laws for all facets of life, and for one to function or carry out transactions in that area of life, they will have to follow the laid down rules guiding such actions. However, failure to follow the rules comes with serious consequences.
Each society has its own legal system and its system of laws that does not just regulate activities, but also make provision for redress for wrongs and punishment for crimes. Sadly, the system of laws is so complicated and covers various fields of endeavour that it takes an expert in that area to help one interpret and guide one through it.
The people saddled with this task of providing legal services to members of the society are those in the legal profession. The services they provide, while being crucial, also comes at a cost, as this is the source of the legal practitioner’s income.
Legal needs of a startup
Sadly, it is not in all cases that an individual or organisation can afford a legal representative or be able to keep one. In the business world, this is mostly the case with startups.
It is important, however, for the entrepreneur or the startup to know that despite the challenges, especially of finance, legal guidance is a necessity. The following are some of the legal needs of a startup.
Corporate structure guidance: The first guidance that a lawyer gives you is corporate structure guidance. This guidance is important because the lawyer, upon hearing your intentions, will be able to advise you on the best corporate structure to adopt that will be best suited for the type of organisation that you want to run.
Incorporation: Incorporation is the granting of legal personhood to an organisation. In most countries, it is a lawyer that goes about this process of incorporating an organisation, as those who are not of the legal profession are not permitted to do it.
Risk identification: There are legal challenges that can be incurred by a startup and which can, if not well handled, lead to the closure or winding up of the company. However, with legal representation, you will be able to avoid certain risks and potholes that can derail your organisation because your lawyer will be able to point them out to you.
Funding options: All startups need funding. Lots of startups fail because of lack of funding, while some run into legal challenges because of the type of funding they received. However, with a lawyer’s help, the startup will be steered towards the right funding sources.
Taxation: Taxation, including tax compliance, is crucial for all business entities. Failure to understand its implication (as it can be quite complex) and to comply with it can be very crucial for the organisation, as tax evasion is a crime. The lawyer helps you understand and comply with the rules regarding taxation.
Conclusion
Small businesses are the lifeblood of the economy of any nation. It is usually these small businesses, when successful, that become big enterprises.
However, there are rules guiding everything in the society, even businesses. If a startup is not properly guided by a lawyer, it may run into challenges that may impede its success and growth or even lead to it going under.
At Creative Space, we run series of programmes that enable entrepreneurs to have access to mentors that will guide them and help them to carry out all the necessary legal procedures that are required of a startup.
These programmes are usually cost-intensive, but with donations from you and your organisation, we can empower startups to build the Africa of our dreams.
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