More to recession than financial difficulties
THE recession is not only causing financial problems for entrepreneurs but also creating a minefield of legal headaches. The Law Society is now urging budding dragons to seek legal advice before investing precious finances during the downturn. The reces
THE recession is not only causing financial problems for entrepreneurs but also creating a minefield of legal headaches.
The Law Society is now urging budding 'dragons' to seek legal advice before investing precious finances during the downturn.
The recession is causing a spike in interest in setting up small businesses as newly jobless people, flush with redundancy money, are flooding to workshops on how to set up a business while others are taking the opportunity to purchase an existing business going up for sale.
"One of the reasons many businesses fail is a lack of planning beforehand. A solicitor will be able to help budding entrepreneurs by raising the important questions that need to be considered when pursuing a business ambition," said a Law Society spokesman.
"The start-up sector is proving to be more resilient than expected because many start-ups grow from small entities and don't need to borrow large amounts of money from banks to begin with, which is an advantage as businesses would find it difficult to secure loans from the bank at the moment anyway."
Law Society president Robert Heslett said: "With the recession sparking new business ideas it is vital to save time and money by seeking clear, simple and trustworthy advice from a solicitor who can help with preparing a legally compliant business plan and ensure compliance with finance, health and safety, employment and tax laws.
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"Advice from a specialist solicitor can help with compliance with legislation such as environmental laws and understanding regulations in particular sectors to enhance the chances of building a successful business.
"The costs involved with breaching some of the red-tape involved in running a business could cripple a newly established enterprise. With small businesses lacking the security to guarantee a small loan they are using precious redundancy money or borrowing from friends and family so the need to alleviate as many risks as possible is crucial.
"Seeking advice from a solicitor at an early stage could help alleviate some of the risks for anyone looking to start-up and a solicitor can help draft a loan arrangement with friends and family."
The advice came as the Law Society launched an information campaign to make consumers in England and Wales aware of how solicitors can help them solve a wide range of problems.
To find out more about legal issues to consider when starting up a business, log on to http://www.lawsociety.org.uk/documents/downloads/12091_lfyb_startbusweb2.pdf