Legal Tips for Singapore-based Startups
Setting up a company in Singapore, regarded as Asia-Pacific’s economic powerhouse, can be a fulfilling yet work-laden task. While entrepreneurs are often associated with risk-taking and facing challenges, when it comes to legal matters associated with starting a business, it is best to proceed with caution.
To help ease your burden on the legal aspects of your venture, here are simple but highly important legal tips that you should know and keep in mind:
1. Seek professional legal advice in the early stages of your business.
Consulting a legal professional is a vital step that most startup companies often forego. At the end of the day, the amount your business would be investing on legal consultancy fees would give you peace of mind that can allow you to focus more on operating and growing your business. Without having to take care of all these matters on your own, you can rest assured knowing that the returns you will be getting from your business will not go down the drain due to legal constraints that might arise in the future.
Further, investing the time and money to get the legal aspect of your business in order will pay off as your company grows, so you have to ensure that all legalities are correctly pulled together from the beginning.
2. Keep your personal assets in mind.
If you are setting up a business with partners, you should make an informed decision on the business structure that your business will follow. If a business entity is legally registered as a partnership, all partners will be held accountable for risks, debts, losses and other legal obligations that the business may incur.
As added protection for all partners, you should study other types of existing structures for businesses with multiple owners such as Limited Partnership (LP) and Limited Liability Partnership (LLP). Here, you can then see which structure would best fit your business. This is important not only for determining how much each partner will own but also for addressing issues that may arise in the long run i.e. if any of your business partners decide to exit.
3. Ensure that all agreements are put into writing.
Enforcing deals that were made only on a handshake and not properly put into writing is a very tricky and unprofessional when it comes to business. Formal documentation is essential as this will be your first line of defense, serving as a reference in the event that an issue or conflict among concerned parties arises. Some of the basic business documents are non-disclosure agreement, employment agreement, terms and conditions, and memorandum of agreement.
In line with its initiative to make doing business easy for investors, the Singapore government introduced a new electronic litigation system. This system streamlines litigation proceedings, thereby making contract enforcement easier.
4. Pay attention to trademarks.
The International Trademark Association (ITA) defines a trademark or service mark as “a word, logo, slogan, package design or other source indicator (or a combination thereof), or any other cognizable thing that serves to indicate a particular source, good or service”.
Trademarks are part of consumers’ day to day life and these enable him to recognize and associate a specific product or service with a particular company and help him decide whether to purchase this product again.
Aside from thinking of your company’s unique trademark, your team should do your homework and research on existing trademarks that are registered by other companies. This way, you will avoid the probability of finding out after a significant amount of time that you have to modify your company’s established service marks as this is a variant of a trademark that is already taken.
5. Know the importance of Intellectual Property (IP) protection.
The World Intellectual Property Organization defines intellectual property as “creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names, and images used in commerce.”
Acquiring the proper protection for the IP of your company is crucial as this can make or break your business. As an entrepreneur, your “trade secrets” must be protected. In addressing this business need, the Intellectual Property Office of Singapore (IPOS) was established by the country’s government to handle registration of trademarks, patents, and designs for businesses, professionals, students and the general public.
Singapore ranked second in the world and top in Asia for having the best IP protection in the latest Global Competitiveness Report released by the Word Economic Forum.
As a business owner, you will be facing various tasks and challenges that would require risk-taking but facing a lawsuit should not be part of it. To successfully establish and run a business, you must be able to cover all bases, including the legal aspect of your business.