Small and medium-sized businesses (SMEs) often require legal services to navigate various legal issues, ensure compliance with laws and regulations, protect their interests, and mitigate risks. Here are four areas of importance that SMEs should focus on.
1. Business Formation and Structuring:
SMEs should ensure that they have in place proper legal structure in place, such as sole proprietorship, partnership, or corporation. This will include drafting articles of incorporation, partnership agreements, operating agreements, shareholder agreements, and other documents that govern the structure, ownership, and governance of the business.
2. Commercial Contracts and Agreements:
SMEs often engage in various contracts and agreements with customers, suppliers, vendors, distributors. SMEs need to draft, review, and negotiate contracts to ensure clarity, enforceability, and protection of the business’s interests. Common types of contracts include sales agreements, purchase agreements, service contracts, distribution agreements, licensing agreements, employment contracts, nondisclosure agreements (NDAs), and lease agreements.
3. Debt Recovery:
Debt recovery for SMEs involve the process of pursuing unpaid debts owed to the business through legal means. SMEs often face cash flow challenges when customers or clients fail to pay invoices or fulfil financial obligations on time. This includes sending timely reminders for payments, issuing letters of demand, and ultimately initiating legal proceedings.
4. Employment Law and HR Compliance:
SMEs must comply with Malaysian employment laws and regulations governing hiring, wages, benefits, discrimination, harassment, wrongful termination, workplace safety, and other employment-related matters. SMEs should have in place proper employee handbooks, employment contracts, policies, and procedures.
These are just a few examples of what SMEs may require to effectively manage their legal risks, ensure compliance, protect their interests, and facilitate business growth.