And truthfully, entrepreneurs, especially young, vibrant, resourceful ones, tend to be overflowing with innovative ideas. They move fast, build business models overnight, and rally peers with the same goals to bring visions to life.
But here’s the hard truth: Planning and execution are not the problem. Starting safely is. What’s the missing piece? It’s protection, not only financial but also legal.
The Missing Piece: Legal Protection
In the legal world, safety is defined by four pillars: adherence, compliance, prevention, and protection.
Many are not that cautious, or are so experienced in these, as everyone is just a first timer. Hence, many entrepreneurs skip the last part —protection — and jump straight into profit-making. In their mind, it is always passion and profit. And that’s totally normal. At first, it seems like the right move. Why spend extra money on legal matters when you can put it into branding, marketing, hiring, or scaling up your business?
But ignoring protection at the start can cost more in the long run, which is why the idiom says prevention is always better than a cure. And this doesn’t just apply to private limited companies; it applies to any business, including partnerships. Because when things go wrong, it will cost more.
Fast forward a few years:
A: It’s not working out. I want to dissolve the company/partnership.
B: No. I want to continue with it.
This isn’t rare. In fact, it’s one of the most common stories behind failed businesses. What begins with excitement and trust can end in disputes and lawsuits.
A: You can take over my share/interest with RMXX.
B: No, this is not how much it’s worth.
A: If you disagree, I’ll see you in court.
So, how do you prevent it?
The answer is simple: put your agreements, thoughts, and expectations in writing.
Yes, you may be good friends. Yes, you may trust each other. Maybe you’ve known each other for years, or perhaps it’s family. But relationships change, circumstances shift, and business brings stress that can strain even the strongest bonds.
What if there is an economic crisis? Change of government?
Think about it: even marriage, a union promised with love and trust, is formalised with a contract, the marriage certificate. If love needs a contract, why wouldn’t business? Business is about clarity, fairness, and accountability. And that comes through written promises, an agreement that captures it all.
Paper over Promises, Please
Sad to say, but it’s true: business runs on paper, not promises. It is always the rule of thumb that papers provide more security than promises.
Contracts, agreements, written terms, these are not just formalities. They’re safeguards. They protect relationships, prevent conflicts, and ensure that when disagreements happen (because they always will), there’s a clear path forward for resolution and moving on.
Entrepreneurs who understand this early don’t just build businesses; they build companies that last. And when ventures do come to an end, they have a clear exit plan, allowing them to move forward with options and certainty, not chaos.
So, before you pour everything into scaling your idea and building your business model, pause, invest in protection, and put it in writing.
Because starting is easy, but starting safely lays the foundation for long-term success.
Ellie Law
This fortnightly column is by Ellie Law of Daphne Leong and Ellie Law Chambers. Ellie and Daphne are building a new kind of law firm—one grounded in empathy, education, and everyday people.
The views expressed in this article are those of the author. The content is provided for informational purposes only and should not be taken as professional advice. Readers are encouraged to consult a qualified professional before making any decisions.
