In a market economy, enterprises play a large role. That means enterprises face many risks, causing loss of properties and reputation. To protect yourself from risks, you need to pay more attention to all your activities. LNP Law will introduce to you a number of information related to legal risks that businesses can face to minimize the risk.
See more: Establishing a FDI company in Viet Nam
To protect businesses from risks, businesses need to pay more attention to their own business activities, strictly implementing risk control activities in the business, even building legal departments to ensure all legal activities are implemented in accordance with the law. Within the limits of this article, LNP Law will introduce to you a number of information related to legal risks that businesses may encounter and minimize it.
Concept of Legal risk
What is Legal risk? At present, there are no documents that give exact concepts about it. However, we can understand that legal risks are related to law compliance activities. In the current market in Vietnam, the scope of legal risks is very wide, not only simply related to the Vietnamese legal system but also including the legal system of the country where the investment is, a system of international treaties,…
The stage that enterprises face legal risks may be:
- Operation (labor, tax,…)
- dissolution, reorganization of enterprises …
For each type of risk there will be different solutions. So, enterprises need to prepare in advance to minimize and resolve the risk.
Enterprise risks may face as follows:
These are risks in the field of financial management such as credit risk, exchange rate, interest rate, liquidity, investment, assets, liabilities, cash flow. … The problem may be high interest rates lead to inefficient investments because of concern about interest payments to banks. Exchange rate risks also made many businesses involved in import and export activities struggle when signing contracts to buy goods in foreign currencies, then the exchange rate increased unexpectedly. Finance is an issue that directly affects business operations of the business. So businesses need to pay special attention to this issue.
Solution: Enterprises can monitor through the financial department. enterprises should also set aside reserve funds, plan financial handling policies in case of risks to be more proactive when risks occur.
Management policy risks:
These are risks related to management policies of the state and internal enterprises. When the state policy changes, it is imperative that businesses follow the new state policy.
For example: Open or closed policies for foreign enterprises may affect the operation of domestic enterprises. Or the change of tax policies affect the operation of the business as well.
Solution: Before launching a new policy, businesses need to thoroughly understand the market to make a reasonable policy. For policy changes from the state, businesses should proactively update in business processes to minimize the impact of changes in state policies.
Intellectual property risks:
These are risks related to trademarks, industrial designs, inventions, image and brand reputation of enterprises. Intellectual property is an important property of an enterprise because it confirm the quality of your products and services. If you are trying to build a brand but not protecting, it can be use to make fake goods, poor quality products by your competitors … This keeps customers away from your products and services.
Solution: Enterprises should register for protection right as soon as possible. The most reasonable time is right after completing design logos, brands, products protected as inventions, industrial designs … Manage intellectual property strictly, exploit reasonable. Once discovered the unauthorized user, must contact the opponent to negotiate or ask a competent third party to resolve it.
These are risks related to human resources of enterprises. Experienced workers may leave the enterprises for any reasons, it increases the ratio of enterprises’ secrets being revealed. The reasons usually comes from salaries, insurance premiums, bonuses,…
Solution: Enterprises need to ensure compliance with the provisions of law about workers’ benefits, also have special policies for long-term, experienced workers …
These are the risks with the signing of cooperation contracts, economic contracts, sales contracts,… If the enterprises does not have much experience in drafting a contract, you should have the assistance of legal enterprise. If not, your contracts may have inconsistent, unclear, or misleading terms, it can be detrimental, leading to damage to you when a dispute occurs.
Solution: Enterprises should establishing a legal department or looking for advice from the legal experts of law firms to ensure welfare, retain good labor.
These are risks related to technology secrets, enterprises’ secrets. For large-scale enterprises, enterprises’ secrets, intellectual property, customer information … are important factors and they need to be protected. There are also a number of other risks such as communication methods, marketing … that interprises need to note.
Solution: The best solution is establishing a legal department with qualified and experienced experts to ensure that enterprises’ activities is compliance with the law. For small and medium enterprises, the use of package legal services is the optimal solution. Besides, It is necessary to build a good security system and responsible staff.
Why you should use the service at LNP LAW?
- As a company specializing in the fields of civil, intellectual property, business and investment, We are proud of being one of the leading legal service providers in Vietnam.
- With a team of experienced professionals, we believe that we will satisfy you by the quality of our services.
- Through rigorous selection processes, each of our legal advisors are supporters of hundreds of small and large businesses across the country, meet the professional knowledge as well as practical experience.
Hopefully, with our consultants, we will solve your problems regarding the Enterprise risks and solutions. If you have any further questions regarding the incident, you can contact the expert lawyers of LNP Legal Consulting Co., Ltd.
For further, please visit our website: lnplegal.com
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