Legal Issues for Small Businesses

If you own your own small business chances are you know very little about the laws and regulations that you encounter on a day to day basis. Understanding the legal issues that concerns small businesses it is vital to your business’ success. The small business association suggests that all small business owners take a few legal courses to understand the legal issues you may come up against. However many small businesses ignore this advice and suffer consequences that could have been avoided.

There are many web sites that offer legal advice for the small business owner. Here are just a few situations that may arise where you should know your legal rights. In all these situations you may find it necessary to contact an experienced corporate attorney.

Contracts or service agreements are a must for any small business. It is difficult to uphold a verbal agreement in court and therefore a well written service agreement can protect you and your business. The service agreement should clearly define all policies and agreements. It should provide protection for your company and its interests.

In each service agreement you should list in detail what your service encompasses. Be very specific and don’t leave anything out. A signed contract is a very important legal document and can stand up in court. Also be sure to add what is considered an extra service and what the charges would be. Make sure that you don’t leave anything out of your service agreement.

At some point you may need to hire or fire employees. Many small business owners are unaware of their rights and their employee’s rights. Even though you may only have one employee it is important that you are well versed in labor standards and other regulations. If you need to terminate one of your employees it is vital that you do it properly.

Disgruntled ex employees may threaten to sue you with a wrongful dismissal suit or similar legal action. It is vital that you know your rights and what you can do in this type of situation.

Hiring Independent Contractors – To avoid some of the hefty labor taxes, small business owners hire Independent Contractors to take up the slack. IC’s (Independent Contractors) are responsible for claiming their income and expenses and filing with the IRS.

You should know that some jobs are actually considered to be an employee’s job regardless if it is done by an independent contractor or not. The IRS has its own definitions that you should be aware of before hiring any independent contractor. Protect yourself and your business and be fully aware of any legal ramifications before making any business decisions.

Sole Proprietorship verses L.L.C. – Under many state laws, founding partners are jointly liable for the debts and obligations in general partnerships. Operating a business as the sole proprietorship puts the owner in a vulnerable position.

A better choice would be to start your company as a limited liability corporation. This means your company is a separate entity that must deal with its own legal issues and you are not personally held liable.

Intellectual property issues should be of great concern to any business no matter what sector you are in. This means you need to understand copyrights, registered trademarks, invention assignment agreements, and confidentiality agreements. Protect your company and its property.

Record Keeping – Improper record keeping can cause serious problems. Accurate accounting records are essential if the IRS is the least bit suspicious about the company’s financial records. Invest in a bookkeeper or an accounting program to make it easier to keep account of your daily transactions. Also, organize files to be readily accessible in case of an IRS audit.

Experienced Corporate Attorney – No matter what entity a business operates under, a growing business will face issues that require the service of an experienced attorney. Unfortunately, cost is a huge issue for most small business owners. Corporate attorneys do charge a much larger sum for their services.

At some point you may need to consult with an experienced corporate attorney. While most attorneys do charge a high fee, there are many situations where it may be necessary to do so. Sometimes there’s no substitute for professional advice.

Choose an attorney that you’re comfortable with and can afford. It is important to build a relationship with your attorney so that in times of need he or she will better understand your situation.

If it anytime you feel in over your head, consult with an attorney. Business owners can get themselves into very serious trouble without the proper legal knowledge.

Article Source: http://www.parentingarticlelibrary.com

Vlad Ehrsam runs a very interesting website at Full Info on Business, visit there today for the latest Business advice, and while you're there sign up for the free newsletter.
Get your own completely unique content version of this article.

Please Rate this Article

5 out of 54 out of 53 out of 52 out of 51 out of 5 

Not yet Rated