Common Legal Problems In Businesses
Businesses are a great venture for you to earn money, recognition, and popularity from your efforts. However, many new entrepreneurs fail to understand that there are numerous steps you need to take before setting up a business. Apart from expenses and income, companies have to deal with legal issues and obligations before they can grow.
The Shikana Group, a leading organization on corporate legal advisory Businesses services in Tanzania, is fully equipped to help you set up your company in the right way. It is important to take the correct steps to avoid severe consequences that will damage your brand image. With an experienced and skillful legal team, Shikana ensures that you have the fundamentals in line with your obligations.
New entrepreneurs may face issues at the beginning of their journey. To understand how you can tackle each of these problems, keep reading.
What Common Legal Issues Do Businesses Face?
1. Licensing:
This is the most common legal problem. New entrepreneurs are unaware of how they can properly license their companies. Most owners do not know the Tanzanian government laws and proceed with business plans aimlessly.
However, this is dangerous as inadequate structuring of a company leads to tax and regulation consequences. Furthermore, once a license has been issued, many don’t know they have to renew annually to signal that the company is still operational. Penalties and fines are imposed on those who fail to renew their business licenses.
2. Shareholder Agreements:
For big businesses, shareholders and partners are common. Each has a direct interest in the company and invests in shares for returns. Revenue, income, and loss are very important to these individuals. Although, in shareholder meetings, circumstances can change quite quickly.
Shareholders have the opportunities to become CEOs and owners as well. A company has equal chances of being split, expanded, or terminated. Therefore, these possibilities can cause major and long legal battles if not handled properly.
In these cases, having a legal advisor in your company will prove to be helpful. Filled with experts who help in corporate legal advisory services in Tanzania, The Shikana Group advises and creates a cohesive agreement to protect your company from further damage.
3. Employee and Employer Contracts:
Other than sole proprietors, a company requires employees and labor. Having employees in your company is very important. These human beings are working for you in an effort to pay their bills at home. You are responsible for their livelihoods, and thus, this requires a lot of detail and focus.
Employee contracts are one of the most important drafts in a company. If the terms are not specified properly and are filled with loopholes, an employee can sue the company for wrongful termination. This can issue another legal battle if you are not careful.
It is important to note that handshake or verbal commitments are not reliable. To avoid this scenario, have a legal advisor who can draft a formal contract that specifies the job description and needs.
How Shikana Can Help
Shikana advises clients on the appropriate ownership structure for the Businesses they want to set up, including corporations, partnerships, limited liability companies, and joint ventures. We analyze the benefits, costs, and risks associated with the choice of a particular business entity based on our extensive experience assisting foreign investors coming into the African marketplace.
We also provide a full range of services related to immigration and labor law, including liaising with relevant Government authorities for work permits, investor permits, and related matters. They use our unmatched experience to deliver efficient and transparent legal and investment advisory support for our clients.
Our firm offers services in the following domains:
- International trade and taxation
- Commercial and business law
- Compliance
- Venture Capital and Private Equity advisory services
Contact us for corporate legal advisory services you can believe in.
