Small business owners don’t always have the resources to hire a lawyer. They only do so when facing a lawsuit, which can sometimes be too late already. It is challenging for business owners to retain the services of a lawyer because that means additional overhead expenses. However, that doesn’t mean you should strive to solve legal issues on your own because this might be more detrimental to your business’ success.
While small business owners should look into retaining a lawyer for their businesses, they should also be aware of the legal issues that their business might face in the future. Whether it’s bordering on personal or labor or taxes, learning about these legal impediments will help you prepare better. They will also arm you with the necessary tools and knowledge to protect your business.
“Meeting of the Minds” for a Binding Contract
For a contract to be binding, there should be a meeting of the minds. This means that both parties adhere to the provisions and terms of the contract. This is why it is crucial to write the terms of the contract legibly and in a manner that will be easy to understand for everyone. Problems arise in contracts when one or both parties have a different interpretation of the terms.
While it is generally okay to follow a contract template you see on the internet, you should still let lawyers review the contract. Do not sign your name or do not let others sign an ambiguous contract. Make sure that both parties understand the provisions of the contract.
Personal Assets and Business Funds
It’s always important to separate your personal and business assets. You shouldn’t only open separate bank accounts for them, but you should also choose the proper business structure—whether a partnership, LLC, or corporation. In most cases, lawyers will argue that you should take advantage of the LLC structure because of its personal liability protection component. This is especially important if you are undergoing divorce proceedings because it can be considered asset protection during the divorce.
Comprehensive Insurance
No matter the cost, always maintain adequate insurance for your business. Comprehensive insurance will protect the company from natural disasters, accidents, data breaches, and any number of possible claims. Specialized insurance policies are available for your business, depending on the type of company you run. Remember that without insurance, you have to personally cover the expenses of any claims against your business.
Written Contract vs. Oral Contract
Technically, oral contracts are legally binding. When the evidence is your word, of course, it becomes almost impossible to prove it. Your word is against the word of the other party. This is why it is important for every business and business owner to have a good reputation in the industry.
Some contracts need to be written down. Real estate sales and sales of goods above $500 have to be on paper. Most attorneys will tell you to write every agreement down since it’s best to err on the side of caution.
Intellectual Property
What will happen to your logo, trademark, and business name if you don’t register them? Anyone can copy and “steal” them away from you. The same thing can happen with your products. If you don’t register them under the intellectual property laws, you risk losing ownership of them. Tech companies and e-commerce companies are the most vulnerable to intellectual property issues.
If you are interested in protecting your logo, brand, and trademark, make sure to talk with a lawyer who specializes in this kind of law. Intellectual property rights are complicated. They also vary by country and sometimes, even state. So, make sure there is someone who can guide you through them.
Privacy Policies
A hot legal topic in recent years is data privacy both for your business and customers. Companies need to safeguard their customers’ privacy. This means that if you’re collecting names, email addresses, home addresses, and other demographic information, you must be upfront with your customers about how you’re going to use them. Some companies sell this information to marketing and advertising agencies. Be very honest with your customers about sharing this information with others.
Businesses will face a lot of legal issues in their way to success. No matter how carefully you operate and manage your business, a bit of legality and technicality here and there can still get to you. It’s essential to be in the know so that you are prepared to address legal problems since these can be detrimental to your business.
