• Tue. Oct 20th, 2020

The Importance of Understanding Business Law for New Entrepreneurs

ByAuthor

Sep 25, 2020
The Importance of Understanding Business Law for New Entrepreneurs

When deciding to do business, maybe the first thing you try to think about is how to do business well. This is to ensure that your business can grow and not suffer losses.
But have you ever thought about doing business legal matters for your business? Indeed, many think that legal factors are not important in business. But on the contrary, law and business are two inseparable things. Because every business agreement that is carried out there will always be a legal aspect that ensures an agreement is carried out. Therefore, we will discuss why every entrepreneur or entrepreneur needs to understand how business law is run. This is necessary to continue to support a business that is run without breaking the law and following existing rules.

Understanding Business Law

Business law is a system of legal instruments that regulates the procedures for conducting trade, industrial or financial affairs or activities related to the exchange of goods and services or other business activities. Placing money as a medium of exchange and payment and recognized by the party who entered into the agreement.
In short, it can be said that business law is a legal system or procedure that regulates all trade-related activities. If you are self-employed and then business law is something that must be understood.

Basic Business Law

According to experts, there are 2 (two) sources of law applicable in Indonesia, namely the source of material law and the source of formal law. The basic source of material law is law that is seen in terms of its content and comes from determining factors such as socio-economic conditions, religion, and the legal system of other countries.

Meanwhile, the source of formal law is a source of law that is closely related to the procedure or method of formation and can be directly used to create laws. The sources of formal law include, among others, statutory regulations such as the 1945 Constitution, laws, government regulations, presidential decrees, and regional regulations.

  1. The Civil Code which regulates the relationship, both the relationship between objects and between individuals and legal entities. In the Civil Code, there are rules regarding buying and selling, leasing, lending and borrowing (including credit), and so on.
  2. The Criminal Code, which, among other things, regulates criminal acts in business, such as fraud.
  3. The Code of Trade Law which specifically regulates trade issues that have not been regulated in the Civil Code, such as the form of a business entity including CVs and firms.
    Purpose of Business Law

One of the objectives of business law is to ensure the continuity of business activities itself. With the existence of business law regulations, it is expected to reduce the potential risks that may occur. Especially for small and medium entrepreneurs who generally lack knowledge and access to legal information. The following are some of the purposes and functions of business law:

  1. Ensuring the efficient and smooth functioning of the market mechanism.
  2. Protecting various types of business, especially for Small and Medium Enterprises
  3. Help improve the financial and banking system.
  4. Providing protection for an economic actor or business actor.
  5. Creating a safe and fair business for all business people.

Pay attention to the selected business entity

This is very important for every entrepreneur or entrepreneur who will start their business. To be able to carry out operational activities, you should choose the right type of business entity. You can choose several business entities such as Limited Liability Companies (PT), CV and firms that can be your options to start a business.

Know the Legal Basis in the Agreement

When doing business, you inevitably will get in touch with business partners or other business partners. By knowing the legal information about the agreement. This will make your business risk less than when you are new to legal information.

Consult a Legal Consulting Service

The last tip that can be done is to use the services of legal institutions in managing all your business matters related to legal issues. Such as business agreements, employee work contracts to other licensing matters.