Legal study

It is one of the important steps in the process of evaluating a project or business idea from a legal point of view. This study aims to analyze and evaluate the legal aspects related to the project and determine their compliance with applicable laws and regulations.

Islam Mohamed - • Corporate finance management

What is a legal study?

A legal feasibility study is one of the important steps in the process of evaluating a project or business idea from a legal point of view. This study aims to analyze and evaluate the legal aspects related to the project and determine their compliance with applicable laws and regulations.

A legal feasibility study usually includes the following points:

Legal Framework Analysis: Requires identifying laws and regulations relevant to the project and understanding their requirements and potential impacts. You may have to consider civil, commercial, tax, labor, environmental and other laws, depending on the nature of the project.

Licenses and permits: Identify the approvals and licenses that the project may need to obtain, such as work permits, building permits, and business licenses. The legal procedures and requirements for obtaining these licenses and permits must be verified.

Intellectual Property Rights: If the project has any elements that are protected by intellectual property rights, such as patents, trademarks, and copyrights, the relevant intellectual property must be studied and the necessary protection obtained for those elements.

Legal Compliance: Compliance with applicable laws and regulations must be observed in the relevant business field. For example, you must ensure compliance with labor, safety, consumer protection, personal data, etc. laws, depending on the legal needs of the enterprise.

Legal liability: Identify the potential legal risks that the project can face and assess the degree of legal responsibility of the project and its owners. Legal risks may include potential legal issues, business disputes, contract obligations, and more.

What are the legal forms of projects?

In fact, if we return to commercial law, we will find that the legal forms of projects vary and vary, depending on the nature of the project, the type of ownership and other things, but we will address the most widespread legal forms, which are as follows

Partnership Companies

It is a legal company between two or more persons, who jointly share the ownership of a project, with the aim of achieving profit and the partners share the profits or losses of the project, and they usually share the responsibility of management as well, where all of them are jointly and severally responsible before others in the event of liquidation of the company, or the claim of creditors for their debts. In the sense that creditors have the right to refer to any of the partners without exception in the event that the company does not comply with payment or is unable to pay. However, the creditor of the general partnership company may not refer to the private funds before referring to the company's funds.

This type of company is characterized by ease of formation, as it requires a limited amount of legal procedures and ease for the presence of a number of partners compared to the individual project, while obtaining financing in the event of expansion due to its limitations is the possibility of linking the continuity of the project to the withdrawal or death of one of the partners, and the difficulty of transferring ownership, as this requires the consent of all partners.

Individual Project

It is a project owned by one person where the project owner manages it himself, including but not limited to shops selling mobiles and electronic devices, or restaurants, cafes, and others.

The owner in this legal form receives all the profits realized in exchange for bearing all the risks associated with investing in him. This form of ownership is the simplest form, especially if you want to start the activity without the investor having a large volume of financial balances.

The owner procures the necessary money, rents or builds the premises and registers it with the official departments. He is also responsible for equipping the project with the required materials and equipment, employing those who help him to work in it, announcing its opening and starting work, and he bears sole responsibility for the success or failure of the project.

Joint Stock Limited Liability Company

It is a legal company between two or more persons, called partners or shareholders, and it has a specific capital divided into indivisible shares/shares where its capital consists of shares that are not offered for public subscription. The liability of the shareholders shall be limited to the extent of their respective contributions to the company's capital.

The financial disclosure of the joint stock company is independent of the financial receivables of each shareholder, and the company is solely responsible for its debts, obligations and losses. Shareholders' liability for the company's losses and liabilities is limited to the amount of their contribution to it.

Each form of previous ownership is characterized by certain characteristics in terms of the form of the internal structure, legal status, size and areas of activity that suit it, each form has its advantages and disadvantages, so I am keen before choosing the legal form that you make a trade-off between these forms to reach the appropriate pattern for the nature of your project We would also like to inform you that there are general laws and legislation for all projects and laws and legislation for specific projects according to the nature of the activity and the legal form

What are the types of laws and legislation?

Special Laws and Regulations

It is directly related and has a direct impact on the project.

Basic laws and legislations: such as the Investment Law

Complementary laws and legislations: such as tax law, financial legislation, labor law and social insurance.

We also note that all these laws have a direct impact on projects and have either positive or negative effects, which requires identifying the areas of investment in investment laws that enjoy advantages and incentives (positive effects). and areas that are subject to costs and constraints (negative impacts).

General Laws and Legislations

They are laws that are not directly related to projects, such as the legislation regulating the identification of the administrative and government authorities supervising the project and the fees, expenses and documents it requires, as well as the legislation of the various relevant ministries such as the Ministry of Environment, Industry, Trade, Economy, Agriculture, Finance and others.

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