7 Common Legal Issues Businesses Encounter
Almost nobody starts a business in order to have more encounters with the law. Unfortunately, that’s one of the biggest effects of having your own business – you encounter more legal issues than you did before.
You might not think your business is the kind that will run into legal issues, but if you look at the list below, you will see that almost every business is likely to encounter some type of legal issue over time.
Choosing a Business Structure
Choosing a business structure is likely the first legal issue your business will face.
On the one hand, you might think it’s easiest and simplest to just be a sole proprietorship, but doing so might put your personal property at risk. Your car, your home and your other valuable assets all become vulnerable in the event of a business lawsuit or your business’ outstanding debts.
During business formation, you should consider business structures that will protect your personal property. While you’re at it, you should consider what might be most favorable from a tax perspective, and which structure best suits the way you imagine operating your business.
Trademarks and Intellectual Property Protection
Many people decide to start a business because they have a brilliant idea. Perhaps it’s a product design. Maybe it’s a bit of software that does something more effectively than other code that’s out there. It could even be a unique ice cream recipe that you dreamt up one day.
Whatever your intellectual property is, the odds are that it’s the most valuable thing your business will ever own. You know that you wouldn’t leave your store’s doors unlocked and open all night, but not taking steps to protect your IP can cost your business far more than any physical robbery.
Employment Law Issues
Once your business gets too big for you to do all the work yourself, you’re going to need employees. With employees comes employment law issues. You’ll have to be prepared to deal with payment disputes, discrimination claims, workers’ compensation issues and more.
Some people think that they can just sidestep this issue by only working with independent contractors. Unfortunately, that can be a recipe for trouble, too. If you don’t fully understand the laws surrounding contractors, you can find yourself in trouble for misclassifying people who are truly employees as independent contractors.
Regulatory Compliance
Another big legal issue your business is going to face is regulatory compliance. Almost every business is governed by numerous overlapping regulatory agencies, and you must comply with a variety of local, state, and federal laws. Violating any of these regulations can cost your business dearly (and lead to a loss of personal property if you didn’t take steps to protect it).
Deciding When You Need a Contract
You might be a “My word is my bond” kind of person who never needs more than a handshake to compel you to live up to your promises. Unfortunately, many people do not operate that way in the modern economy. If you don’t have a contract to compel someone to live up to their promises, you will find yourself without payment, without supplies, and without a recourse to be made whole from the party that didn’t fulfill their end of the deal.
Keep in mind that contracts aren’t just for enforcing promises. They serve to clarify what exactly each party is agreeing to. A contract can keep you from accidentally overpromising or overdelivering in ways that can cost your business.
Product or Service Liability
Whenever you provide a product or service to someone, you are exposing yourself to potential liability if that person believes that what you delivered is faulty in some way. If they believe that the fault led to injury, property damage, or other costs, they might try to recover those costs from you.
It’s important to consider what potential liability your business is exposed to, then work to protect yourself from it. Using a contract to spell out your liability is one powerful strategy. You also need to understand the regulatory framework your business operates within, because not complying with regulatory requirements can expose you to greater liability.
Obtaining Business Real Estate
After your IP, real estate is likely going to be your business’ most valuable asset. The decision of whether to buy or lease real estate is a big one for your business, and it depends on a variety of factors, not the least of which are the terms you are able to obtain for a lease. Leases can contain many restrictive terms that will affect your business’ operations now and in the future.
A lease is a contract, and it’s important to have this contract reviewed by a lawyer before signing. Having a lawyer review your lease and negotiate terms can save your business a considerable amount of money while giving you flexibility to meet your current and future needs.
Let the Law Office of E.C. Lewis Handle Your Legal Issues
As a business owner, you’ve already got more work than you can handle. You need all the hours in the day to handle the actual running of your business. You don’t have time to devote to dealing with these legal issues. Plus, your business is the work you’re skilled in. You likely know little about the law, which can lead to costly mistakes. Instead of wasting time and money trying to handle legal issues, have a small business lawyer handle those issues for you.
Elizabeth Lewis is an experienced business attorney. Since 2007, she has been helping many small and medium businesses in Denver and across Colorado to deal with these and other common legal issues. She’s dedicated to the success of her clients, and she can help you successfully found your company and navigate it through the difficult early growth stages.
To learn whether Elizabeth is the right lawyer for your business, please contact us today for a consultation.