Changing mindsets on the 4 critical areas of welfare and prosperity: Entrepreneurship

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There’s a lot of preparation that goes into launching a business. Creating a business plan and securing funding are common items on the startup to-do list. And once you are finally ready to turn your business idea into a reality, one thing you should add to that list is time to review common business laws that could affect your business.

In every country there are business and commerce laws that every business owner and entrepreneur should be aware of. Understanding these rules, laws and regulations governing your business will help you take advantage of any benefit they offer while ensuring you stay compliant at all times. They also ensure there is integrity in your business and gives both business owners and consumers confidence knowing that they can conduct business in a fair and transparent environment. It sort of provides a level playing field for all businesses to participate in.

Let’s take the UAE as an example, according to the World Bank’s Ease of Doing Business 2016 report, the nation ranks 31, meaning it is relatively easier to start up a business in the UAE than anywhere else in the Middle East and North Africa (Mena). With numerous free zones, excellent infrastructure, minimal taxes, low import duties and a strategic location, the UAE scores far ahead of other neighboring countries such as Bahrain (65), Qatar (68) and Saudi Arabia (82).

In the Philippines, there are also laws and regulations that govern businesses from registration, operation, up to termination. Some of these laws are not only created to oblige business owners to do their duties but are also made to force the government to protect these business owners.

May it be here in the UAE or elsewhere, depending on the geographical location you choose to set up your business, there are legal bounds that would affect your business that you need be aware of. What follows is meant as an overview to get you exposed to the legal aspects of running a business.

The type of business. Your type of business will determine the kind of license you require. Whether it’s commercial, professional or industrial licenses, these will define the basis of your operations. Certain activities such as food trading, jewelry trade, legal consultancy and the likes require further approvals from other governmental departments.

Business as a legal entity. All businesses are categorized as some sort of legal entity that governs the way they are treated under the law. The type of entity you pick will depend a lot on your liability profile and whether or not you will have investors. Some business structures are:

  • Sole proprietor
    a business that is owned and operated by a natural person (individual). This is the simplest form of business entity. The sole proprietorship however, is not a legal entity. The business has no existence separate from the owner who is called the proprietor.(SEC)
  • Partnership the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business. (IRS)
  • Company a legal entity made up of an association of persons, be they natural, legal, or a mixture of both, for carrying on a commercial or industrial enterprise.(Wikipedia)
  • Franchise in its’ simplest form is an agreement or license entered into by two parties, the franchisor and the franchisee. (Whichfranchise)
  • Limited Liability a type of liability that does not exceed the amount invested in a partnership or limited liability company. The limited liability feature is one of the biggest advantages of investing in publicly listed companies. (Investopedia)

Strict compliance. Compliance to local (city/country) laws will be something that all businesses will need to deal with.  This becomes challenging when the law changes or you assumed you did not have to perform a certain task. In these cases, ignorance of the law is no excuse. So, to cover yourself and your business, do your homework diligently. Research, attend trainings and seminars or seek guidance from mentors/legal counsels.

Sound contracts. Most businesses will enter into a contract with a person or another business at some point in their existence. These contacts are what define how the working relationship will be carried out and who is responsible for what deliverables or payments.

Resolving disputes. The legal system is setup to resolve disputes. These disputes usually revolve around some sort of breach of contract, violation of intellectual property or breaking a law. When you are faced with a legal action, it is best to seek out counsel to assist you in navigating the nuances of the legal system.

Whether you plan on running a small business under a business name or as a registered company, you must comply with laws that are administered and enforced by the country you are in.

In conclusion to our series – Changing mindsets on the 4 critical areas of welfare and prosperity: Leadership, Investment, Finance and Entrepreneurship, we want to inspire and encourage you to jump start your own business. If you have a passion that you want to turn into something but don’t know where to start, allow Philippine Business School to assist you by joining our Entrepreneur Masterclass – the smart way of setting up a business in the UAE. This course is the perfect opportunity for you to have a solid knowledge of technical and legal aspects of your business that would help ensure you a more fruitful and sound business operation.

We are also inviting all global Filipinos to join in the Philippine Business School’s LIFE Masterclass where we help you expand your horizon on the 4 critical areas of welfare and prosperity: Leadership Investment Finance Entrepreneurship (LIFE). The program provides a unique opportunity to bring your leadership skills to the next level; gives a solid understanding of today’s investment landscape; helps you learn how to make better financial decisions to increase the value of your company in the marketplace or manage your personal finances effectively and equips you with knowledge on the global business trends to ignite your career or passion in business.

We appreciate your comments on this article, visit our website at http://phbusinessschool.com/newsletter. Connect with our office at Ibis One Central Building with telephone nos: +971 45232488. You can also find us on Facebook, Instagram and LinkedIn. For more information visit our website at www.phbusinessschool.com

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