Starting a business is a tedious process. Taking an idea and conceptualizing it into a successful
business is the mark of fine entrepreneurship. But merely limiting your knowledge to business
trends or management techniques is short-sighted. Regardless of the nature of your business,
there is one factor that remains constant, which is Law.
Business and Law go hand in hand together, in fact, as far as entrepreneurs are concerned,
having an understanding of the legal provisions that relate to your business gives you an edge
over the others and provides greater certainity in decision making.
Every business springs from an idea, an idea considered to be groundbreaking. A fundamental
precursor to establish before executing the idea, is to find out whether anyone else has already
implemented the same. This relates to Intellectual Property Law, right from the name of the
business, to the product or service, it is important to understand the market. Another requisite is
for the business or the start-up, to be established under appropriate legal provisions. Hence,
identifying the nature of your business and complying with the legal requirements attached to it
is mandatory.
This brings us to our first concern, which is identifying the legal nature of your business.
Whether it is a sole proprietorship, a company, a partnership or, a Limited Liability Partnership.
Identifying this is integral, as each of these consists of specific regulations and legal provisions.
Hence, before setting up the business, there are several regulations and requirements to be
adhered to, for the business to be legally established.
Why does a founder need to know this? The legal regulations laid within each of these separate
business structures, also contain within them the necessary information on Taxation, member
liability, foreign ownership, survivability, and so on, which aids decision making.
As a new business owner or founder, there are several risks and unknown factors involved.
Knowing and understanding the legal background that governs your business is of great benefit
and prepares you to be equipped for possible falls or risks that may arise. With legislations
dedicated to minute aspects of business such as competition law, securities law, etc, a grasp over
the basics would be beneficial in the long run.
As you get started with your business, a cursory understanding of contracts and contract law goes
a long way. It gives an outline as to how your professional relationships and obligations with
partners, staff, or other parties involved with the business can be legally defined and made
enforceable. Contract law also contains some important provisions that come in handy to new
businesses such as Non-Disclosure Agreements, Non-Compete Agreements, and Non-
Solicitation Agreements. Hence knowing how these agreements work and how they can be
utilized is a valuable piece of information as far as entrepreneurs are concerned.
Now, you might think, what is the need for an entrepreneur to take the time to learn and know
the law, isn’t this why a lawyer should be hired for? Knowing the law that governs your business
or aspects of it, is an essential skillset. It also helps you to explain your concerns to a lawyer and
at the same time have a firm grasp over your lawyer’s advice and act accordingly.
Learning and understanding the fundamentals legal aspects of your business is an optional
exercise. But the benefits that come with knowing the law aids an entrepreneur in several
decision-making processes. Knowing the law of your business sector is equivalent to having a
cheat sheet that helps you be prepared for most scenarios that might play out in your journey as a
founder.
So, how much law should a founder know and learn? Law is constantly evolving as practices
change and and technology makes more advancements. Knowing the law and learning the law
will never be detrimental, but rather goes a long way and helps to anticipate and apprehend
possible circumstances that may arise in the course of business and be better prepapred to deal
with them.