If you are an entrepreneur, you already know that running a business is complex. Being a CEO of a company does not mean that you get to have a pile of cash all to yourself. Instead, you will be going through certain challenges and you will constantly encounter new circumstances, and you will make acquaintance with things that were previously unknown to you.
For instance, if you kick off a start-up, you will be dealing with stakeholders. These stakeholders are the legal co-founders or shareholders of your start-up. In this regard, you will need to have a written legal agreement that none of the parties can deviate from it – no matter what.
Thus, to keep up with these ‘legal agreements,’ you can not always appear in court. After all, it is time-consuming and costly. You will have to hire a lawyer to represent you in court. Likewise, you will need to make frequent appearances in court. As an entrepreneur, you know it is too much to ask for.
This is where the process of arbitration comes into play. It is by far the most effective way of resolving legal matters without appearing in court. This article will shed light on the term “arbitration.” We will also see how effective the arbitration process is before we will draw our conclusion on whether or not arbitration and start-ups go hand in hand.
What is Arbitration, Actually?
In simple words, Arbitration is a ‘legal’ process where experts voluntarily agree to resolve any legal matter of your business. These folks may not be professional lawyers or judges. But they should have some understanding of legal proceedings.
Keep in mind that you will have to choose your arbitrator wisely. Your arbitrator must be familiar with the legal domain that you are looking to resolve. Secondly, these arbitrators should be in the form of a legal bench. You can not rely on a single person to be your arbitrator.
Can Arbitration and Start-Ups Go Together?
The simple answer is yes. They certainly can! In fact, if the entrepreneur knows the complete arbitration process, it can go a long way in resolving the legal matters of the start-up.
But there is a catch: The process of arbitration can also be dangerous for the start-up. Why? Simply because these arbitrators are not certified lawyers. Also, they are not professional judges. This is where the fear lies: the fear of making wrong or misleading decisions.
Since arbitrators are not professional, their decision can be misleading. However, you can also sign an arbitration contract with professionals as well. This way, you can get the most accurate results.