Ethical And Legal Issues At Startups of Business

The ethical and legal issues involved at the start-ups of the business are very crucial for the new entrepreneurs because if new entrepreneurs successfully cope with ethical and legal challenges, then such entrepreneurs will keep carry on the business in the right direction and on the path set in the Mission Statement of the business.

You may also be interested in Types / Kinds of Start-UP Entrepreneurs

The most important ethical and legal issues at the start-up of the business are:

1. Establishing Strong Ethical Culture For A Firm

It is the most important issue faced by any entrepreneur in these business days. The data related to establishing a strong ethical culture in an entrepreneurial firm is not good according to latest surveys conducted among the employees of the business. These surveys and research clearly show that a strong ethical culture is the need of time and it is established within the organization by establishing an example of moral values and code of conduct.

Strong Ethical Organizational Culture is compulsory for effective cooperation among employers and employees. Employees must be given fundamental rights. Employers should not exploit the employees. They should give them good working conditions. If there are over working hours, then the employers should give them over time payments.

Social and Moral Protection should be provided to women during business hours and Sexual Harassment should be controlled in the organization culture. Equal Employment opportunities should be provided at every cost.

2. Hiring Professional Lawyers

At startup of the business, New Ventures need to fulfill many legal matters during the startup process like registration of the business, Preparing Legal Documents like Memorandum of Association (MOA), Articles of Association (AOA), Prospectus, etc.

How To Select an A Lawyer or Attorney For Your Business

It is very simple, you need to contact with Your Local Bar Association and select that Attorney which is specialized in your line of Business Idea.

The selected attorney should have following qualities:

(i) He / She should be familiar with start-up process of the business

(ii) He must guide you in raising sources of finance for the business.

(iii) Attorney should be honest and complete the work within the time frame set by himself / herself at the time of living.

(iv) The Attorney should charge reasonable fees to his / her clients

It is very important for an entrepreneur that he / she not only select professional and competent lawyer but also know by himself / herself about the startup process of the business.

3. Founder’s Agreement

Leader or founder of the venture should follow the mission of the business and the founder of the entrepreneur should show full commitment and make full efforts in achieving that main objective of the business.

For this purpose, a founder’s agreement is made to solve issues related to Equity Sharing. This document helps the business owners how to share capital among them and how to get and invest cash in share capital of the company. In case, if a founder of the company dies or leaves the company, then the remaining owners may purchase the shares or offers shares to replacement person.

4. Avoiding Legal Disputes

An entrepreneur’s leader should set and exemplary and cooperative organizational culture that control differences among employers and employees and customers of the business. The result of this organizational culture is that the business matters and dealings are done in a proper way. However, sometimes, there may be differences and disputes among employers, vendors, contractors, and employees. In that case, try to minimize and mitigate the disputes among initially before the disputes would become worse and expand. For, this purpose, a Mediator, that is a neutral third party, can play an effective and vital role to solve the differences and disputes among the disputed parties.

An entrepreneur tries to avoid legal disputes by taking following steps:

(i) Write down the written agreement for buying and selling goods and services.

(ii) Payment to Vendors, Suppliers or Customers should be made in time. However, if there is delay in payment, then Valid Explanation should be provided to them.

So, it is all about Legal and Ethical Issues faced by Entrepreneurs during start-up process of the business. Also, if an entrepreneur is in a position to successfully and effectively cope with Legal and Ethical Issues Faced by him / her at the Start-UP of the business, then Entrepreneur will surely start a successful business and even may carry on Long-Term business.