16 JULY 2018
As a business owner, legal protection is a critical aspect of running a company.
From ownership to liability, there is a long list of issues that need to be put down on paper.
Even in the beginning stages of growing a business, there are significant risks. Though small- and medium-sized businesses often overlook legal paperwork because of cost, this is a mistake. The business, the brand, and the people running the company are all on the line.
Here are 5 uncomfortable truths about why legal documentation is necessary for businesses at every level.
1. Business Documentation is Mandatory
The expense of legal documentation is not optional.
The sooner you get your business documentation squared away, the less likely you are to face serious legal repercussions down the road.
The truth about legal documentation is that the company either mitigates the risk before a problem arises or pays for it down the road. Handling legal documentation properly is always less expensive than lawsuits and court settlements.
2. Size Doesn't Matter
It doesn’t matter if your business is a sole proprietorship (one person) or if you have 50 employees.
Every size of business needs the protection of the law. Critical aspects of business arrangements should be properly documented and legally enforceable. This includes shareholders arrangements, shareholder rights, company management, employment of staff, contracts with suppliers and customers, NDA’s, partnerships, MOU’s, IP rights, patent, and business alliances.
Even if you are just starting out, don't let yourself believe that small ventures are exempted. It is a cost of doing business.
3. The Choices Are Limited By Budget
Large, multinational corporations have teams of lawyers. Small- and medium-sized businesses don’t have the budget—or the workload—to support a full-time legal team. That means smaller companies have two options.
First, small companies can hire a lawyer on retainer and pay hourly for services provided.
Second, they can handle their own legal documentation by using a high-quality legal document template library and seek limited legal specialist assistance in reviewing their documents and talk to them as needed.
A service like Shakeup! is the perfect resource for companies that decide on the second option. They are a professional services platform that provides DIY legal documentation with document review services and a legal helpline. Legal specialists help review your document and are on hand to answer your calls should you have questions.
Whether your company hires a lawyer or uses a legal document template library, there will always be a cost. Businesses must acknowledge that quality legal services are never free but is a necessary part of doing business.
4. Legal Requirements Will Always Be There
Legal requirements are part of the business lifecycle. They are not going away.
It begins on the first day of registering the business name and structure. Next you develop a product and protect your ideas. You handle employment and take care of your staff. Then you buy and sell goods and services. Everything until your final sale on the day you close your business requires legal documentation to keep your business above water. It's an ongoing need.
For hands-on business owners who want a cost effective alternative to hiring expensive lawyers, online legal services that provide useful resources like an online Business Law Guide that is easily accessible and understood, can support a business throughout its lifetime.
5. The Cost Breakdown: Pay-Per-Use vs. Subscription
The way lawyers charge fees can be likened to a pay-per-use cost scheme. They charge to prepare each document and have hourly expenses on top. The fees can really add up.
Have you used music subscription apps? You can listen to an unlimited amount of music without paying to own it all. You pay a minimal monthly subscription fee and choose what you want to listen to, when you want to.
Shakeup! subscription plans work the same way. Think of it as having access to a template library for unlimited preparation of your legal documents and a lawyer on-hand to help review them when you need them. They provide peace of mind for small-medium business owners because whenever they need a legal document, they can easily do it themselves.
Also, businesses avoid over-the-top legal fees. Multiple drafts of the same document can be prepared (e.g. employment letter of offer) without incurring additional costs.
Being legally protected by documentation is vital. It is mandatory for businesses of all sizes and it is the only way to properly protect the future of your company.
Though it’s uncomfortable to admit that the legal requirements of business are constant, each business can decide how to handle it. Even with a small budget, it is best practice to ensure legal protection for your business by seeking out services that your company can afford.
Sign up for a trial subscription and gain access to a high-quality business document library at ShakeUp!