As a small business owner, you’re going to be faced with daily challenges such as management, competition, product delivery, quality control and all sorts of other fun details of successful business administration. And if these aren’t enough, there is always the looming specter of legal problems suddenly landing on your company or even you personally as its owner.
Here are four of the most common such legal problems along with some useful strategies on avoiding them before they have a chance to nail your company.
This is one of the major causes of legal disputes most business owners are going to face. Depending on your jurisdiction, your employees may have enormous legal rights regarding workplace conditions, treatment and most importantly in this context, termination. If you fire someone in a way that can be construed as wrongful or unfair, you’re leaving yourself badly exposed to potential lawsuits under all sorts of pretexts.
A good (but not foolproof) way of dealing with this potential problem is to make all employees of any kind sign a labor attorney drafted legal agreement as a condition of hiring. Make sure the agreement thoroughly and unambiguously covers any and all conditions under which you might decide to fire someone quickly.
Harassment and Discrimination Claims
Another major cause of lawsuits for businesses is the common occurrence of employees or former employees suing on the grounds that they were sexually harassed or discriminated against based on sex, race or disability of some kind. Since these things can be difficult to prove either way and can also cause a lot of media attention under the right circumstances, you need to work hard on reducing the possibility of harassment or discrimination charges well in advance.
Conduct regular meetings to make sure that all of your employees are respecting each other professionally; nip any claims of harassment, racism or offensive behavior in the bud as early as possible by quickly investigating them and visibly showing your willingness to punish transgressions.
Accident and Injury Claims
These might come either from customers that claim your products or services caused them harm or employees working onsite who suffer injuries. Either way, you’re looking at legal problems that can range in size from minor claims to total, bankruptcy inducing disasters. Since a major injury with life threatening consequences can incur costs that run into the millions of dollars, failing to take workplace and product safety into consideration at all times can one day kill your business.
Abide by strict quality control in your products or services, maintain a workplace that rigorously adheres to all safety regulations and be sure to buy liability insurance for the possible case that does pop up -don’t shirk on coverage either, a 250,000 policy may seem large but a single case of crippling injury or death can wipe it out and leave you in deep debt.
Copyright, Patent and IP Disputes
If there is one thing there is never a shortage of in either the world of small business or major corporate combat, it’s disputes over intellectual property of one kind or another. If mega corporations such as Apply and Samsung, both possessing armies of lawyers that cover every single angle of daily business, can still get into legal disputes over each other’s product IP, then your small business is hardly immune to the same potential problem.
As a business owner, you need to plan out and enforce a very strictly controlled IP strategy that covers all of your intellectual property, how it applies to employees and any possible conflicts it might have with other companies in your field. Enforce clear contracts with all the other partners in your business about control of all intellectual property and also form contracts with your employee staff to ensure that they know exactly under what conditions they produce patentable, copyrightable or trademark worthy materials while working for your company.
The income tax code and all its associated sales tax laws, local tax rules and state or provincial regulations can be an enormously complicated burden for any business owner. Due to compliance failures that were either intentional or accidental (accidental in most cases) thousands of small businesses are either fined, audited or even criminally charged every year for making mistakes on their tax payments and billing.
Your business can cover this by preparing in advance with a well-researched list of possible taxation regimes depending on business structure, hiring a well-qualified business accountant and possibly even hiring a tax attorney to review any more complex financial plans or larger amounts of revenue.
About the Author:
Brett Gold covers small business lawyers like Hays Firm. He has worked in the legal industry for over 10 years. In his free time he enjoys catching up on the Game of Thrones book series.
Photo Credit: By User:Avjoska (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC-BY-3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons