Legal challenges women entrepreneurs face around the world

Women’s Entrepreneurship Day is a day on which the work of women entrepreneurs is observed and discussed, held on November 19 each year to raise awareness about the problems women facing in entrepreneurship ecosystem.

 Because only with creating awareness, we can have a world in which we don’t need a special day for women entrepreneurs any more.

Confidence is an essential part of prosperity and growth. When a woman leads, others follow.

More women are starting businesses, but they still face challenges operating their businesses. The number of women entrepreneurs is on the rise.

Regardless of the positive outcomes, women are struggling to survive in the business environment given the challenges they face.

Legal Issues to Be Aware of When Starting a Start Up Company

It is a large mistake to not deal with legalities from the beginning. While the concept of an “oral agreement” can be binding in certain instances, it is not generally applicable on a global scale. For this reason, it is highly recommended that potential legal issues are discussed from the beginning as the beginning is something that is necessary to form the foundation of one’s business. Failing from this at the start is something that is vital to move forward and ultimately, have a great deal of success.

Commercial Relationship of Founders

Many common legal issues arise when it is not clear how the partners are commercially This can be easily solved when ascertaining how the partners intend to conduct business together and what avenues they need to establish to do so. Having these conversations will make it easy to figure out which kind of commercial relationship should be drafted into the partnership agreement.

Employment Contracts

As the Start Up grows, it will need employees.

 For this reason, it is highly recommended to have employment contracts in place, but also, to anticipate taxation issues that are associated with employees. Benefits/Heath Insurance should also be considered in terms of what the Start Up will offer and realistically be able to afford.

Trademark Registration

Depending on where the company will be doing business, it is vital to register the Trademark in the various jurisdictions. It is imperative to do so because the Trademark is something that can potentially cause many lawsuits over royalties and even, losing one’s branding with consumers in a given market.

Lack of Contracts with Suppliers

In terms of import/export companies, for example, having solid contracts with suppliers regarding price and damaged goods is essential. This is a way to prevent a huge loss in investment due to situations that arise through the normal dealings of business.

Taxation Issues

Depending on the markets that you have elected to conduct your Start Up business, you must pay attention to taxation issues. Taxation is something that will make or break your company’s future. Failure to comply with taxation is a major mistake that costs many Start Up companies dearly.

The facilities that women entrepreneurs are getting from the government./private sectors

Not all business people are fortunate enough to have an investor or financier for their business. Some have to bootstrap their entrepreneurial ventures,  rely on credit cards or raise capital on their own. Women’s businesses are among the leading ventures that lack financial support. It is also common for women to be denied loans because of gender and cultural biases—many institutions tend to fund male-owned businesses.

What would women achieve if they had a perfect support system? Struggling or failing in business could be the result of a lack of an adequate support system.

 In business, no man’s an island. Women tend to face the greatest challenges in getting support, from lacking the relevant connections to needing financial access or emotional support.

They also need mentors and sponsors to guide them in this new path. The support system is often expensive, forcing women to delay starting their businesses.

Gender biases while becoming an entrepreneur

What do you need to know about gender inequality?  Laws, cultures, religion, and politics are built upon a patriarchal foundation.

Women must work their way up in the masculine world while facing stigma and discrimination. Although laws and policies have attempted to create a favorable business environment for everyone, the actual changes have not yet been implemented. 

Gender lens investing, which refers to strategies that address gender disparity issues and/or analyze gender issues to illuminate investment decisions, is gaining traction.

Legal aspects of export and import industries for women.

Understand legal issues for exporters and should making sure you comply and overseas legal requirements, you'll need to anticipate potential problems. You should think about how to protect any intellectual property and make sure you draw up clear contracts with customers and agents

For the uninitiated, international trade can be daunting and overwhelming. Armed with my brilliant ideas, I have no doubt that each of you will succeed in international trade and become famous. Many beginners incorrectly believe that their business is too small to compete on a global level.

 Not so! Maybe they fear the field is too dangerous and risky a business venture for an operation without a formal international trade division or the capital to open foreign offices and develop a foreign market. However, these perceived fears are actually far from the reality of the international market today.

The international market is waiting to be plundered by you. It is ripe with opportunities and potential profits for anyone willing to invest time and effort more than anything else.

Even for small businesses, this huge global market has a relatively open field. It is a new world economy where trade barriers are slowly beginning to crumble and technology and communication are leveling forces. These global demographic and economic changes make it an especially opportune time for a domestic business or even a single entrepreneur to venture into international trade.

The small business has a distinct advantage over mega-companies in breaking into this field, small companies are better suited to do business in the new world marketplace since they are more flexible, less bureaucratic, more dynamic and often more innovative.

In fact, the solo player, even novice solo player in international trade, can fare just as successfully as the larger import/export businesses with the aid of some technology, contacts, research, and ofcourse, a good lawyer! Clearly, this is an opportune time for any small business or small player to venture into international trade and to reap the many advantages of the field such as travel, networking and enormous profit potential.

Getting Started in the Global Market

There are two basic issues to consider when getting started in import/export:

 (1) business structure

(2) business contacts.

 Business structure generally refers to and is tremendously determined by your role in the importing and exporting of goods. In the simplest terms and for our purposes, the four major players are defined below:

(1) Importer – person or entity that brings in foreign goods or services into the country for its own use, but more often for resale.

(2) Exporter – person or entity that sells their own goods or services to foreign buyers.

(3) Import/Export Merchant – person or entity who buys goods or services from one country for the purposes of resale in another country.

(4) Import/Export Management Company (IEMC)- essentially a person or entity that serves as the middleman in deals between importers and exporters.

Of the four structures/roles listed above, the IEMC offers advantages particularly for the small business or solo player since there is little need to spend huge amounts of capital to purchase goods first, and then to tie up the capital waiting to sell these goods.

The IEMC functions exclusively as the middleman in deal negotiations and profits only when a deal is closed. In this respect, the IEMC must be knowledgeable about trade, good at negotiators, and have an extensive contact list.

Once the business structure is determined, the second basic consideration is business contacts, which is especially important for IEMC’s and others just starting out in this field. There are four major and preliminary contacts to be established by the IEMC:

1. Customs Broker – This contact is particularly important to establish for importers since the broker’s job is to have special professional knowledge about customs regulations and tariff schedules and to file the necessary paperwork, and as such to ensure that imported goods pass through customs with minimal tariffs, delays and problems.

Granted, it is not essential to retain a customs broker for an IMC, but by doing so the burden upon you to have this special knowledge is lessened and shifted to an expert.

(2) Freight Forwarder – This is an in-house person at a manufacturer, independent shipper, or contracted shipping line company whose job is to ensure that the delivery of goods arrives intact. The freight forwarder must have special knowledge of shipping options and prices. Again, it is not essential to have such a contact, but highly beneficial since it once again saves you time and relieves you of this burden.

(3) Commercial Bank – It is essential to establish a banking relationship with a commercial bank that has familiarity with international trade, deal structuring, and deal financing. Make sure your bank has a letter of credit department. A special consideration for businesses specializing in trade with one specific region is developing a banking relationship with a bank in that region since they will already be familiar with that market and have open lines of communication in that region.

(4) Manufacturer’s Representative – For importers, they function essentially as independent salesmen who promote and sell your imported good to retailers. Manufacturer’s representatives function more so as their name implies in exporting.

Often, these people representing domestic manufacturers seeking to expand into the international market will approach exporters.

General Overview of International Trade Financing:

A letter of credit substitutes the credit of a bank for the credit of an applicant. Specifically, it is a written instrument issued by banks stating that payments will be made on behalf of applicants to beneficiaries, if the beneficiary fulfills all the conditions described in the letter of credit.

The typical bank customer for a letter of credit is someone engaged in international trade and who is a purchaser of international goods.

 According to the Uniform Customs and Practices for Documentary Credits (the “UCP”), a letter of credit is “an arrangement, however named or described, whereby the issuing bank acting at the request and on the instructions of its customer (the applicant for the credit): is to make payment to or to the order of a third party (the beneficiary) or is to pay or accept bills of exchange (drafts) drawn by the beneficiary, or authorizes another bank to effect such payment, or to accept and pay such bills of exchange (drafts) or authorizes another bank to negotiate against stipulated document(s), provided that the terms and conditions of the credit are complied with.”

Documents, not merchandise or performance

The bank deals in documents only, not merchandise or performance. Therefore, the bank cannot ensure that the underlying transaction has been fulfilled to the satisfaction of the applicant. In letter of credit transactions, banks are concerned with representations, not with ultimate truth. When all stipulated documents are presented, the issuing bank must pay the beneficiary. Therefore, the applicant (the bank’s customer), cannot rely on the letter of credit for protection from the beneficiary’s performance problems.

The bank’s responsibility is only to examine documents with reasonable care and to ascertain that they appear to comply with the requirements of the letter of credit. Thus, once the letter of credit is issued, the applicant faces the risk that the letter of credit may be paid through improper and even fraudulent actions of the beneficiary. The bank, however, cannot refuse to pay on the letter of credit based on such actions unless those type of actions are stipulated as conditions on the letter of credit instrument itself.

This is often a source of confusion for the unsophisticated importer, who may ask the bank not to pay on a letter of credit due to disputes with the exporter/beneficiary, or due to the fact that they changed their mind about the transaction.

As much as the bank may want to cooperate with the importer, it cannot do so. Its role is confined to the review of documents.

Although many large companies are quite familiar with the letter of credit process, the smaller businesses will be very dependent on the bank’s letter of credit department for expertise in international trade. Again, however, the bank’s sole role is to determine whether presenting drafts are accompanied by the documents required by the letter of credit and whether all conditions set forth in the letter of credit have been satisfied.

Which countries are emphasizing and providing necessary support to women entrepreneurs?