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COVID-19 has upended nearly every aspect of everyday life around the globe, and businesses have been hit especially hit hard.

Many companies, organizations and start-ups are falling through on loans or failing to meet other contractual obligations, while others continue to scramble to find sound footing on which to carry on operations.

While starting a business during a pandemic may sound impossible, experts contend opportunities do exist.

Jennifer Fan, assistant professor of law and director of ºìÌÒÊÓƵ's Entrepreneurial Law Clinic, discusses challenges, dispels misconceptions, and provides meaningful insights into starting and running a business in the midst of COVID-19.

Read the Transcript

Jennifer Fan: I'm Jennifer Fan. I'm an assistant professor of law and I direct the Entrepreneurial Law Clinic at the ºìÌÒÊÓƵ.

Three-Minute Legal Tips: What are key legal issues businesses are facing right now during the COVID-19 pandemic?

JF: During the pandemic, the most common legal issues I see have to do with companies not being able to meet the terms of existing contracts or companies, unfortunately, are facing the threat of going out of business.

TMLT: What are some tips you have for businesses during the pandemic?

JF: Well, I think the first one has to do with the answer that I gave before which is if you're having issues with your contract try to negotiate contracts before the issues that you see become problems that will be insurmountable. Second, I would say stick to the fundamentals regarding good corporate governance. So, that means things like keeping good records, keeping your personal bank account separate from the company account.

TMLT: What are some specific items businesses must address in order to renegotiate contracts?

JF: Usually, it's the monetary terms or when something is due, like so if they are an independent contractor they might not be able to deliver what was promised during the specified time period, you know. The pandemic has really upended our lives in many ways and I feel that a lot of the contractual issues that companies are facing now won't be as much of an issue once the pandemic is over because, you know, the supply chains are not disrupted, people's work schedules aren't in disarray because, you know, they have child care issues and so forth, so hopefully it'll return back to normal from a contractual perspective at least.

TMLT: What are common misperceptions people may have during this time regarding businesses?

JF: So, a common misperception that people have during this time is that it's not a good time to start a business. So, you see a lot of people who are going to start a business, you know, not knowing a pandemic was going to happen that are pulling back, but there may be opportunities even in this time period. Companies like Uber, Venmo, AirBNB, they all started during the great recession. So, I think that there's really the possibility of businesses, who are starting now, to be successful later.

TMLT: Finally, what are some positives people may experience while starting a business during a pandemic?

JF: I think businesses are going to have to be more disciplined whether it's in the business sense and how much they're spending to putting their legal infrastructure in place earlier. So, I do see some positives because, again, discipline is going to be key during this time period in order to succeed as a new business. So, if you have those fundamentals in place early on, I think that leads, creates the groundwork for greater success.