7 Legal Essentials for small businesses

Published on October 6, 2017 By , 0 Categorised in:

Before you launch your startup it is important to get well-educated about legal procedures you should take care of. This is a very important step for every small business owner, and by skipping it, you may put your business in jeopardy. In some cases, you may even get sued and imprisoned. If you want to grow your business legally and safely, it is crucial to follow the tips presented in the following text.

Get trademarks, patents, and copyrights

You’ve probably started your business because you offer something your competitors don’t have. If that’s the case, don’t hesitate and protect everything that is proprietary. Give your best to prevent stealing of your intellectual property. Of course, you’ll need to be informed about the difference in laws when it comes to code, ideas and physical products. All of those can be protected but in a different way. Keep in mind that tech companies are the most vulnerable, and good knowledge of the law is essential.

Hire an experienced lawyer

There are two types of mistakes new entrepreneurs do. First of all, they decide to hire a lawyer after the launch of the startup. This is bad practice since lawyer won’t be able to help if you missed doing something six months ago. That’s why you should hire a lawyer before you’re open for business, so they can be familiar with all relevant details.

The second mistake is hiring an inexperienced, young lawyer. Of course, young people should get a chance work, but you will need someone seasoned. This way, all issues will be addressed and resolved in no time. If you are eager to give a chance to a young lawyer, go ahead and team him/her up with the veteran.

Choose the right business structure

Learn about different business structures and choose the one that suits you best. You may choose from following: LLC, S corporation, sole proprietorship, partnership, and corporation. You should go over all upsides and downsides tied to each one before you registering the company. For instance, if you decide to be a sole proprietor, you should be aware that the law sees you and your business as one. Therefore, if something bad happens, you can lose your business and all your personal assets.

Write Terms and Conditions policy

Every time you enter some website, especially those that provide some kind of service, you’ll stumble upon Terms and Conditions agreement. This agreement should include all details about the product or service you provide. Besides that, customer obligations should be described as well. If you skip this step, you can get sued by an unsatisfied customer, and your company will suffer. In order to avoid this, write the agreement and show it to every website visitor. Add a checkbox, so the customer can agree with the rules.

Take care of your employees

As your business grows, you’ll need to expand the staff. Once you start employing, make sure to follow all legal obligations coming your way. This is very important in case of work-related injuries. If you don’t create good worker compensation system, you may be sued, and in some cases, imprisoned. Get educated about compensation law, and feel free to seek an advice from a professional company, such as Withstand Lawyers. By taking care of all needed documentation on employees, you’ll protect them from accidents, and save your business.

Create a privacy policy

Another essential step you should take in order to conduct business legally is to write a privacy policy. In case you are selling something via your website, you will probably ask your customers about a piece of their personal information. Nobody knows what will happen with the given information if you don’t make your privacy policy public. Your customers should know if you are going to share or sell their email addresses to third parties. This is their legal right, and skipping this step will most certainly get you penalized.

Get nondisclosure and non-compete agreements

As mentioned above, you may have something proprietary about your service or product and should give your best to protect it. That information can be a customer list or special recipe, in case you’re in the food industry. These agreements will legally bind the employees who have access to this valuable information. It may happen that one of them wants to start their own competing business, and your client list could really help them out. This means you will lose some of your customers. Because of that, make sure all employees sign non-compete and nondisclosure agreements, and protect your growing business.

Final thoughts

Before setting up your business, spend some time writing a business plan and creating a healthy budget. Don’t forget to invest in an experienced lawyer from the first day so you won’t break any law. Another professional you will need is a good bookkeeper. Those two will be your most valuable employees since they will work with money and legal obligations. Missing to hire them on time can really put your business in a bad spot. Go ahead, prioritize and start scaling your business.

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