A] Why Lawyer?
Some Business persons may have all the luck but most are just good business people. It is a fact that having success in business is not just about doing things but it also about obeying certain business laws and the majority of successful entrepreneurs are well versed with the relevant laws that surround their business market as this actually helps to avoid the potential failure that follows costly litigation. Just a suggestion to the new business persons that they shall visit various websites relating to business law and get basic knowledge of business law to ensure you are aware of something if not all of the business laws.
It is a fact that when businesses are starting up, they often overlook the necessity of including legal support in the budget. Legal support is viewed as a luxury, or something not needed unless the business gets into a legal mess. In reality, legal support is especially important for small businesses
A.1] Does Law affects businesses?
It is a fact that Government can change the rules and regulations in businesses from time to time and hence it becomes more relevant for you to be updated with the new changed laws as most of the time new changes can do bring or force you to change the operating way of your business. It is here the real fact is that it will not be possible for you to know all the rules and regulations that apply to your business line and hence this calls for getting someone who knows better than you and represent you who else better than a good business lawyer as they are the right person to direct you toward your success and profit without breaking the laws.
A.2] What is the importance of having a Legal Attorney/Advisor with you every time?
Working with a trusted Legal Advisor is exceptionally beneficial when the unexpected occurs as one shall not expect to know in advance what things may go wrong or when things go wrong. You shall remember the fact that “The middle of a tailspin is not the best time to find a legal attorney” and this does call for an established relationship with a trusted attorney who can help you with effective guidance when it’s needed most. Further, it is fact that emergencies are not the only situations that call for advice from your legal attorney as things are constantly popping up – from trouble with employees to surprise opportunities to grow, and having a legal partner a phone call away will ensure a quick, decisive response.
Please note that MSME/small businesses have the most to lose if things go wrong and, unfortunately, it is impossible to protect a business from every possible legal issue. However, businesses can and should work to minimize their risk of exposure and maximize protection. Dedicating upfront time and a budget line item to finding and working with a trusted attorney is an investment all businesses should make.
B] Whether Legal Costing is not Expenses but Assets
The reason I have chosen this topic has been in my mind for many years now and in fact, I have around more than 100 legal case study to share which have always brought me to the question as to “why business entities don’t realize the value of Legal in their business” and when this was asked to those clients who are part of 100 legal case study the reply received was costs attached to Legal but the most important reply was “never thought that getting legal advice will be of any help” and further some of the states that they believed they could handle the issue better on their own without having legal background”. Hence, I thought of penning down my views to readers and business entities of “how to know the value of Legal in their business” or can say “Valuation Statistics in their Business”
Mr. Rahul came to meet us in the Year 2018 for getting certain agreements done for his business as till this time he invested an amount of Rs. 8 Lakhs for forming the company, marketing, structure, employees, social media accounts, server, and all other charges. During the meeting to know the purpose and intention of executing agreements, there was certain question was asked which is as under along with reply:
• What is this business is all about – this business is a like to property shareholder where any number of people can become the owner of the property and we will issue Share Certificate
• How this will work – We shall inform about the property and call the people to invest jointly and whoever does that will be allotted the Share certificate stating of being the owner of the property
• Your income = it was replied by way of an ex, if there is a land worth Rs. 2 Lakhs and there are five owners and if this land is sold for 5 Lakhs, we shall charge a commission of 3%
Once this query session was done, we were confused about the legality of this business and asked the following query:
• any prior legal opinion you have taken in this business model = Not required as I am aware of this business model and laws in this regard
• what is your income post all legal and taxation compliance – he said around 3%
Upon this, our query was as under:
What about the payment of Stamp Duty for the purchase of property which is around 6% = He was surprised and said “is there any Stamp Duty has to be paid” and our Reply was Yes you have to as per Registration Act and Stamp Duty Act. The moment this was informed, the whole business model which had a 3% margin of profit came down in negative and this then discussed from all angles and then after a month, Mr. Rahul dropped the idea of this business and had to incur the loss of around Rs. 10 Lakhs.
What Mr. Rahul could have done to avoid Rs. 10 Lakhs loss?
Mr. Rahul could have approached the Legal Advisor and get the opinion and then get the Taxation opinion and then take the second opinion and it would have been on that moment itself could have realized the danger in its business model but instead of doing this, Mr. Rahul preferred to go alone and only at last end preferred coming to Legal Advisor
Hence, it is a fact that “Legal Costing is not Expenses but Assets”
One has to understand and realize that “LEGAL SPENDING IS ALWAYS EXPRESSED AS A PERCENTAGE OF THE BUSINESS REVENUE”.