Online businesses are stressing over legal issues and loans
An insights report by LegalVision found a 120% increase in enquiries from online businesses, but one-fifth still saw loans as a key legal challenge.
Financing was also a concern for small businesses, with 20% of respondents identifying it as a key issue. LegalVision also notes that alternative forms of financing such as convertible notes (a debt instrument that converts to equity when a triggered event takes place) and crowdfunding are becoming more common.
The rise of startups and a heavy focus on innovation has seen other challenges become commonplace.
"Businesses often rush into launching their product or service without legal documents in place to protect the business and its employees. A lack of well-drafted documents, including a written dispute resolution process, can be problematic for businesses if issues arise," the report said.
LegalVision saw an 82% jump in business disputes, many of which related to employment and franchising. Mid- and later-stage businesses also face disputes, usually relating to suppliers, debt collection and litigation. Commercial and retail leasing disputes were also common, with LegalVision citing the changes to Retail Leases Act across the country.
Worryingly, 68% of survey respondents were not aware of the Australian Privacy Principles (APPs) which came into place in March 2014. All businesses and non-profit organisations with an annual turnover of more than $3 million are required to comply with APPs.
The report highlighted the need for Australian businesses to be aware of their legal obligations before launching their product or service. Despite the Internet making it much easier to start a business, the proper infrastructure, which includes legal, needs to be in place.
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