Why Legal Literacy is Vital for Young Entrepreneurs
4 September 2021
It is critical for entrepreneurs to have knowledge of legal matters
A lot of areas are emerging in which it is hard to work within the confines of a single educational background. This is particularly true for young entrepreneurs. Today, it is vital to be adept in a range of fields, such as digitalization. In order for a project to get off the ground, it needs to be given the necessary boost, and this energy comes specifically from jurisprudence, which is what makes it sustainable — Elina Sidorenko, General Director, Platform for Working with Entrepreneurs’ Enquiries.
Today, without knowledge of the legal profession – without a baseline level of knowledge – it is very difficult in principle to work in a particular field. This is not only true of entrepreneurship, it is also true of working at municipal and government bodies — Vladimir Gruzdev, Chairman of the Board, Association of Lawyers of Russia.
Far fewer entrepreneurs who have a basic legal education fall into unpleasant situations, and do so far less frequently — Sergey Bekrenev, President, European Legal Service.
Work needs to be done to raise legal literacy among entrepreneurs
The educational work being done by the Association of Lawyers is no less important than efforts to provide financial and organizational support — Vladimir Gruzdev, Chairman of the Board, Association of Lawyers of Russia.
The government and the business community need to work together to improve legal literacy in society
Synergy between the government, business community, and society is vital. If each side offers a resource of some kind – even a small one – it will step by step become possible to resolve any issue. I propose that we all join forces for this vital social mission and do what we can to make young entrepreneurs – and entrepreneurs in general – more literate in legal matters, and to keep losses arising from ignorance of legal norms to a minimum — Sergey Bekrenev, President, European Legal Service.
Entrepreneurs often come under pressure from the authorities due to a lack of knowledge in the legal sphere and a reluctance to acquire it
A lot of issues arise not from an overt desire to commit a wrongdoing, but because people simply do not understand what they are doing when they accept public money for their projects, do not understand what form of tax administration applies for a particular project, and so on — Elina Sidorenko, General Director, Platform for Working with Entrepreneurs’ Enquiries.
The people who read the civil code fall into that same rare category of people who read instructions for medication. A person will either do it or not, hoping to wing it — Elina Sidorenko, General Director, Platform for Working with Entrepreneurs’ Enquiries.
In failing to recognize the importance of legal matters, entrepreneurs are making problems for themselves further down the road from the moment they establish their companies
In terms of priorities, it is vital that an entrepreneur brings in a lawyer at the earliest possible moment, when a startup is still at the planning stage. That is because a lawyer will be able to ensure the right system is in place — Elina Sidorenko, General Director, Platform for Working with Entrepreneurs’ Enquiries.
It’s vital to first look at how to properly build up a business process, and in doing so, make use of current legislation. Only then should operations actually begin — Yulia Mihaleva, Deputy Director, Russian Quality System (Roskachestvo).
Costs borne by the entrepreneur grow enormously when they don’t turn to a lawyer in time. That’s because prevention always works out cheaper than treating a problem. <...> The lack of a baseline level of knowledge is causing people – entrepreneurs included – to get into fairly serious problems which can be difficult to extricate oneself from — Sergey Bekrenev, President, European Legal Service.
Ensure that entrepreneurs select the best form of incorporation for themselves
It’s essential to realize that while the entrance fee may be a rouble, the exit fee can be two. When you want to get into business, becoming self-employed is the simplest option, and the person is not registered as a sole trader. At the same time, this option enables a person to work within a legal framework, and to get a sense of the opportunities available to them. I think this is an excellent option, and it avoids the potential for some errors to be made. A self-employed person can work in virtually any area. We have in effect legalized people who in the past may have been held criminal responsible for running a business venture without the appropriate permits or licence — Vladimir Gruzdev, Chairman of the Board, Association of Lawyers of Russia.
Creating new educational tools and involving entrepreneurs in the process
Entrepreneurial skills and legal matters – all the nuances laid out in legislation – are both things that people need to read about and dedicate hours to. And nobody will be able to speak about trends better than businesspeople. Nobody will be able to teach people about business other than an entrepreneur — Andrey Shubin, Executive Director, All-Russian Non-Governmental Organization of Small and Medium-Sized Businesses OPORA RUSSIA.
The Russian Legal Test is an example of a successful tool which can both focus the attention of young entrepreneurs, and create a separate branch, i.e., a special test for them – for micro-enterprises and small businesses. <...> Development tools are also needed – these could be free seminars for young entrepreneurs, and they could be whole courses — Sergey Bekrenev, President, European Legal Service.
It’s essential to find a community made up of the exact same kind of entrepreneurs doing their own thing, and to examine them as case studies. And these communities exist. <...> At the very least, it’s absolutely essential to learn about the region where you are doing business, and to know who is responsible for protecting the rights of entrepreneurs there — Andrey Kovalenko, Commissioner for Entrepreneurs’ Rights in Sakhalin Region.
Simplifying legal language and reducing the number of requirements imposed on businesses
We need to work on simplifying legal language. The second thing is to reduce the number of requirements imposed on businesses and to shift the focus onto prevention — Andrey Shubin, Executive Director, All-Russian Non-Governmental Organization of Small and Medium-Sized Businesses OPORA RUSSIA.