Legal Issues and disputes are complex, methodical, and typically time-consuming processes. There’s good reason for it, however, a business owner or entrepreneur’s worst nightmare – even as a plaintiff in a claim – is to be spending exorbitant amounts of capital on legal fees. Running a business requires a healthy and consistent cash flow and so a smart owner will ensure precautions like tax filings, administrative measures, site surveys, and employee vetting are all carried out to remediate those risks.
Naturally, there’s only so much you can do. Accidents, disputes, and problems can arise regardless of your business size or the industry you’re in. A founder has to put on many different hats when building a business, and one of those will be understanding the legal context of business dealings. The goal isn’t to run into a legal claim, but rather to know what to do should one arise. Here, we’re looking at some of the most common legal claims that can befall a business and how to avoid them.
People, People, People
As a small business, in particular, hiring your first few employees is a massive step forward. It can mean increasing your output, opening new revenue streams, and growing your enterprise beyond your own means. However, it also comes with a big responsibility. You’ll be paying someone’s salary and there are going to be protections you must fulfil and obligations to honour to ensure your business is behaving compliantly as an employer. If you’re working in a hazardous industry, like electronics, manufacturing, or construction, a common issue will be personal injury.
Whether it’s to yourself, your employees, or a visitor on your premises, there can be many types of injury claims, and having both professional representations via a solicitor and knowledge of what to do in the case of an injury are both key. For example, recording as much as you can to provide context for an injury can help to pinpoint liability, as well as ensuring you have suitable insurance on your premises and workforce. Other employee-related issues like classification, pension contributions, tax filings, correct termination procedures, and documentation of citizenship or right to remain are very common – yet hugely important – aspects of running a business without exposing yourself to potential legal issues.
Own Your Ideas
Intellectual property disputes can be very hard to resolve and a nightmare for a business owner who may feel they or their products have been imitated by someone else. This is straightforward to solve by ensuring you’ve taken out patents and trademarks on your ideas and products before going public with them.
Keeping the Peace
Introducing shareholders is another major step for any business. However, internal stakeholders and eventual shareholders all have reasons to want different things for the enterprise. If disputes do occur, it can affect the running of a business both financially and operationally. Typically, this would involve drawing up official shareholders’ agreements that stipulate the rights of those who invest in you. As for internal stakeholders, co-founders, and the like, your soft skills of negotiation and clear protocols are critical. Severe disagreements can lead to potentially stubborn legal challenges.
Legal claims in the business world are usually the last resort. It’s rare for either side of a proceeding to want them to drag out, lengthening the cost and time spent. However, the reality is that the gears of law make it very difficult for a small business to survive lengthy legal proceedings. Preparation, understanding, and proactivity are your best friends. So that even these most common legal quandaries don’t have to leave your business to battle it out in the courtrooms.