For a small business owner, understanding the aspects of business law that apply to your business is critically important, as it directly impacts how your business runs. Business law includes contract law, employment law, tax law, and workplace safety law. Because of the complexities of business law, it’s important to get legal advice for your small business from a qualified business lawyer.
Here is a basic list of 9 smart legal tips for small businesses to ensure that you are established properly and in a position to operate smoothly.
Choosing the proper legal entity structure for your business is one of the first tasks you should take care of. The type of entity for your business impacts how you borrow money, how you will be taxed, and how you structure the sale of your business. It’s important to establish your business in a separate entity in order to protect your personal assets. If your business is not a separate entity, you will be personally liable for the debts and obligations your business incurs.
Certain original legal documents must be completed and filed with your state. For example, if you are operating as a corporation, you must file articles of incorporation. If you are operating as an LLC, you need to file articles of organization. Other governing documents include resolutions for making business decisions, paying payroll and taxes, maintaining bookkeeping, complying with federal and state labor laws, safety and wage requirements, and acquiring and maintaining licenses or permits. Additionally, agreements for the operation of the company and protocols for stockholders are critically important in management going forward.
Operate your business with written contracts instead of a handshake and oral agreement. Technically, oral agreements are legally enforceable. The difficulty with oral contracts is there is no documentation informing what the agreements are or when they were made. Contracts must address each party’s obligations and explain how potential conflicts and/or issues regarding your products or services will be resolved.
If your business has employees, you need to ensure that it complies with all of the federal and state employment laws. These laws dictate things such as paying employees and applicable overtime, operating a safe workplace, and fair treatment.
Whether your business has W-2 employees or independent contractors has bearing on the legal requirements you have. Protect your business’ trade secrets using agreements with employees and contractors so they can’t leave and start their own businesses that compete with yours. Create a handbook to manage employment issues. A handbook specifies policies and expectations, therefore protecting the company against potential employee lawsuits and complaints.
Your company has very little recourse, if any, when another company steals your logo, branding, or business name if you haven’t created a patent, copyright, or trademark. Laws for these areas can protect your business in areas like branding and intellectual property. Intellectual property is especially at risk with technology and e-commerce companies. Business law attorneys know the intricacies of intellectual property and copyright laws and can guide you through these areas that are so important to your business.
With the increase in cybersecurity data breaches, your small business has a legal obligation to safeguard the personal cyber information of both customers and employees. Use antivirus measures and security software to protect this information from theft.
Many legal issues can arise relating to the way your business markets and advertises your products and services. These activities are governed by the Federal Trade Commission (FTC) as well as state and local laws. The most basic rule regarding advertising and marketing is prohibition of deceptive practices to market or advertise. There can be extreme consequences for breaking this rule.
Experienced legal professionals in the area of business law can help you to make the right decisions and avoid legal issues that can be destructive to your small business. You can incur great expense in fixing mistakes that were made without proper counsel and guidance.
At The Doyle Law Offices, P.A., we are experienced business lawyers who can help with business law issues for small businesses, family companies, partnerships, LLCs, sole proprietors and established corporations. Contact us today by calling (919) 228-4487 or complete the form below to schedule an appointment.