Top 10 Legal Mistakes That Small Businesses Make
Business owners—especially the new ones—make mistakes; there’s nothing new about that. However, some mistakes can be much more costly than others. Here are some such costly legal mistakes that business owners need to avoid:
Having a Clear Deal in Order
One of the biggest mistakes that you can make as an entrepreneur, when it comes to your small business, is not having clear dealings with the other cofounders in place. Why? Well, it’s because the partnership deal caters to such concerns that have got the potential of causing enormous problems in time if left unanswered. From the split in the ownership to the split in the profit, there are a lot of points that need to be addressed.
Failing To Incorporate
Many a time, you see small businesses come into existence as a proprietorship and not as a separate legal entity. It is recommended, therefore, for a business to have the right legal structure—in accordance with their needs—and choose from the various kinds of incorporations accordingly.
We all know how a businessman needs to be farsighted, right? Well, the fact of the matter is that a businessman needs to be so farsighted as to plan even the procedure of liquidation in advance. This is why it’s so important to have a shareholders’ agreement in place, for it will save you from chaos when you’re selling the business off.
A majority of the small business owners spend days and nights in streamlining their operations; yet they miss this simple detail. If you think about it, not having an employee guideline in place basically gives your employees a cover to get away with whatever it is they wish to get away with. It’s of utmost importance to seek the advice of an expert lawyer to found such human resource policies that fit your organization.
Exploiting Freedom of Speech
One of the biggest mistakes that small businesses have been known to make is rubbish talking their competition in the name of freedom of speech. Such a scenario gets small business owners into trouble often, owing to how freedom has limits. Therefore, it is recommended for business owners to consult their lawyers so that they know exactly how to exercise their freedom of speech in the best possible manner.
Not Protecting Your Intellectual Property
It’s strange how small businesses hire top security officials for protecting their physical property but pay no heed to the idea of protecting their intellectual property. It’s recommended for small businesses to consult attorneys, therefore, on how they might be able to best protect their intellectual property with patents, copyrights and trademarks.
Suing For Everything
One of the biggest mistakes that enthusiastic small business owners make is that they think of the courtroom as the answer to every problem. They often end up filing in so many lawsuits that it’s impossible for them to finance all of them, for a small business can only earn so much, right? This is why it’s better for small businesses to settle their issues outside of the courtroom.
Protecting the Customers
With the progress of the internet, the websites of small businesses house large amounts of sensitive customer data. It’s of utmost importance, therefore, for businesses to take measures for the protection of their websites from hackers so that the precious customer data might not be lost. Remember: it’s the customers that bring value to your business, so go out of your way to protect them!
The Tax Issues
Every business owner detests paying taxes, right? This is why it is so important for them to pay special heed and importance to their taxes and how they might be reduced legally. There are a number of ways in which this can be accomplished, ranging from the choice of legal entity to the collection of sales tax. A tax attorney can do wonders for a business in this regard!
The Legal Counsel
If you think about it, there is a vast variety of laws that businesses are subjected to, ranging from incorporation laws to tax laws. Owing to the need for understanding law, it is of utmost importance for a small business owner to have the right kind of legal counsel by their side. Why? Well, it’s because how well your business is able to perform within the legal environment is directly dependent upon the quality and expertise of your counsel.
It’s easy for business owners to make mistakes, right? If you think about it, however, you’ll realize that a lot of these mistakes can be avoided by having the right kind of attorneys by your side!