Running a business is exciting. You’ve just set out to achieve your dreams, and you’re on your way to becoming financially independent. However, there’s the other side of the equation you don’t hear about too often — litigation. In this post, we’ll discuss some of the major business legal issues you may face in your journey.
Running a business means taking on certain responsibilities. How you address those responsibilities will dictate whether you’ll have legal issues or not. Some of these are minor and often written off as beginner mistakes, but some legal issues are quite serious. Here’s a top 10 rundown of what you can expect.
10 Business Legal Issues Your Company May Face:
1. Legal Battles Within your Organization
Before we even get to outside factors, let’s talk about the legal issues that can arise within the highest echelons of your organization. If you’re partnered with someone, you are risking all kinds of legal problems if the two of you suddenly establish different views on what it means to run a business.
Solution – Define your relationship with your co-founders through legal documents. Have everything in paper form and make sure it’s all clean.
2. Trademarks and Copyrights
One of the more common problems new businesses have is either failing to protect their intellectual property well enough or stepping all over someone else’s. No matter how small your business is, you need to protect your main assets as soon as possible.
Solution – File patents and copyright your intellectual property as soon as possible.
3. Assault and battery in the Workplace
If your business has active employees on the payroll, there is always a small chance that your business might have to deal with assault and battery in the workplace. Legal experts over at https://www.fighterlaw.com/practice-areas/criminal-defense/assault-and-battery/ argue that this is a risk for companies that do both manufacturing and services. Your employees can be on both ends of the stick, especially in retail and similar industries.
Solution – Recognize risk indicators and react on time
This may sound trivial, but this is probably the most important of the business legal issues you should watch out for. If there’s one thing you need to stay on top of, it’s your taxes. Being late or avoiding/forgetting to pay taxes as a business can put you in hot water before you can say ‘tax evasion’. Legal consequences can be severe and penalties brutal.
Solution – Familiarize yourself with state and federal tax laws and regulations. Additionally, hire someone to help with taxes.
5. Know All Relevant Regulations to Your Industry
Almost every industry out there is regulated in some way, shape, or form. Chances are that yours is too. It’s your job to be fully familiarized with the rules and regulations that govern your industry. Most new businesses that run into legal issues are found to be in breach of said regulations.
Solution – Know your industry’s playbook by heart
6. Know your Contracts
Writing a contract can be simple, or it can be complicated — it all depends on whom you’re dealing with and what it is that you’re selling. Whatever the case may be, your contracts need to be 100% bulletproof. You need to have all of your bases covered and all of your obligations clearly defined.
Solution – Hire a professional to help you write solid contracts
7. Incompatible Business Structure
When you decide to open a business, you need to figure out which form of business structure best suits your needs. The type of structure you choose will dictate your taxes, your obligations, and your liabilities. Don’t leave yourself vulnerable by failing to choose the right form of business structure.
Solution – Do your research on business structures and company management as a whole.
8. Have Insurance
Insurance is a big deal in most industries. Everyone makes mistakes, and it’s not impossible that you will too. Having insurance is often a legal requirement as well. Make sure to have yours sorted out because if you end up needing it and not having it, you’ll be in trouble.
Solution – Find out what kind of insurance you need
9. Follow Employment Laws
Making sure that your employees are all sorted out is imperative. Set up a proper contract for your employees. Also, make sure that your contractors are working off of a clean contract as well. Don’t risk litigation over what is essentially one of the most basic rules in business.
Solution – Learn employment law and follow it to the letter
10. Set Up your Location
If you’re running a retail store of some kind, make sure that you’ve got everything covered. You’ll want to ensure that your location is in compliance with all municipal ordinances as well as any OSHA regulations. You can avoid expensive litigation by making sure that everything is up to snuff.
Solution – Make sure you know your codes, laws, and regulations
Navigating the Learning Curve
I hope you’ve learned a little from these 10 business legal issues that your company may face in its operation. Protecting yourself from all of these forms of litigation is a considerable task. You’ll need to do your homework and figure out the rest on the go. Don’t worry if you make a mistake or two, but try to protect yourself from major risks.
Want to read more of our business-management posts? Check out our tips for how to grow your startup or our steps on how to start and dominate online marketing.