If you’re a small business owner, navigating the complicated nature of business law can be hard. But understanding and addressing common legal issues can help you avoid expensive and time-consuming legal disputes later on. Small businesses can face any number of legal challenges.
You may be tempted to ignore these issues in favor of more pressing business matters, but addressing them can help you be more proactive (which can save you a significant amount of time, money, and stress over the long term).
Here are some of the common legal issues that small businesses can face and should know about.
#1: Entity Formation
Entity formation refers to the process of creating a legal structure for a small business. It determines how the business is taxed, how assets are protected, and how it’s arranged. Here are some of the challenges that a small business can face with regard to entity formation:
- Choosing the right entity.
- Registering with the state.
- Drafting and filing Articles of Incorporation (for corporations) or Articles of Organization (for LLCs).
- Getting an Employer Identification Number (EIN).
- Drafting and adopting bylaws or an operating agreement.
- Maintaining compliance.
It’s an important step for any small business, which is why you need to speak with a qualified attorney.
#2: Employment Law
Employment law can affect a small business in the following ways:
- Hiring.
- Wage and hour laws.
- Employee classification.
- Discrimination and harassment.
- Family and medical leave.
- Workplace safety.
- Termination.
If a business doesn’t comply with employment laws, it can lead to costly legal disputes and fines. It can also damage the business’s reputation. That’s why a small business needs to stay informed on the latest employment laws and regulations. It’s also important to consult with an attorney if they have any questions or concerns.
#3: Intellectual Property
Intellectual property (IP) refers to the legal rights that protect creations from the human mind. This can include inventions, artistic works, and symbols (among many others). Small businesses can encounter a number of legal issues related to intellectual property. Some of them include the following:
- Trademark infringement.
- Copyright infringement.
- Patent infringement.
- Trade secret misappropriation.
- Domain name disputes.
If you’re a small business, you should know about the different types of intellectual property. You also need to be aware of the steps you should take to protect your intellectual property rights. This includes registering trademarks, copyrights and patents (where applicable), as well as any steps you need to take to prevent trade secret misappropriation. You also need to speak with an attorney if you have any questions or concerns about your intellectual property rights.
#4: Taxes
Small businesses may have to deal with a number of tax-related issues that can have a negative impact on their bottom line. Some of them can include the following:
- Business entity selection.
- Payroll taxes.
- Sales tax.
- Tax credits and deductions.
- Tax audits.
- Tax planning.
If you’re a small business, you need to be aware of the different tax-related issues you may encounter. You should also take steps to help you stay in compliance with tax laws and regulations.
#5: Legal Disputes
As a small business, you may have to deal with various legal disputes (either as a plaintiff or a defendant). Another business may steal your intellectual property, and you may decide to sue them for damages. A worker may claim that you wrongfully fired them and sue your business. One of the ways that you can keep the case from going to court is to negotiate a dispute beforehand.
Some disputes can take place in a small claims court, but they can also go to trial as litigation. Small claims courts can be used to dispute small amounts of money, but larger cases may require litigation. Be sure to check with an attorney to find out what’s appropriate for your specific case.
You should also get legal representation in any of the following cases:
- Someone is injured at your business property.
- Someone is suing you for wrongful termination.
- A state, local, or federal government agency has filed a complaint against you or is investigating your business.
- Your business is involved with environmental issues.
- A negotiation for the sale or acquisition of a company or assets.
Having the right legal representation can help you secure the future of your business, because that person can be invaluable if a critical issue arises. If you’re looking for a business lawyer in Corpus Christi who can help you deal with these issues, be sure to reach out to Gale Law Group.