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How to Reduce Startups Legal Risks and Costs?

By Subeesh Hrishikesh -

In order to strive and succeed in the market, every entrepreneur has to tactfully thwart legal hurdles, its possible with the help of smart and big in house legal departments, and its affordable only for large companies. what startups can do, to resolve their disputes, and not let them escalate to litigation. Litigation is a process that consumes time, money and your peace of mind. so it’s not the best option for the startup to choose.

Here I suggest a pro-active legal approach using due diligence mechanisms, technology usage, and alternative dispute resolution techniques (ADR).

Alternative Dispute Resolution (ADR) mechanisms like mediation, arbitration, etc. which when used as a tool to solve your disputes prior to litigation would cause comparatively lesser trouble in terms of money, time, paperwork and most importantly, your peace of mind. The same is the case for start-up companies.

There are certain legal requirements and obligations for every start-up company which they may not be fully aware of, but not knowing of which would lead to unanticipated consequences. Some of such things are,

o   Complying with taxation and accounting laws.

o   Business licenses.

o   Adhering to labor laws.

o   Protection of intellectual property.

o   Contract management.

o   Winding up of company and liabilities.

You might be very well aware of the unavoidability and necessity of having a full legal back up for any startups or company. ADR services will prove to be highly useful and efficient compared to other existing legal aid set-ups existing and available.

How ADR helps-

  1. Not a single issue goes to the court before a session of ADR, in case of a dispute.
  2. ADR is more efficient and outcome-oriented that could be beneficial to both parties, be it your client, employee, shareholders or even board members.
  3. Less expensive.
  4. Less time-consuming.
  5. Minimal paperwork.
  6. Peace of mind.

 These processes are less expensive and less time consuming compared to conventional litigation processes as they may take years together to finish. Moreover, ADR sessions will be carried out by trained and qualified personnel entrusted for the purpose, who will help you reach an amicable and creative solution. Hence you’re legal risks and costs will be reduced.