Seven legal issues that can harm you and your business


Date: 19 April 2023

An intellectual property lawyer in her city-centre office

Being your own boss can be both financially and personally fulfilling. Although owning your own business has numerous advantages, there are legal difficulties that could cause problems for your firm with both your clientele and the local business community. In addition, legal issues are frequently the most difficult and complicated problems that firms confront.

Legal conflicts not only have the potential to put you out of business, but they may also have personal repercussions for the business owner. The most frequent legal problems that could ruin your company are listed below.

Employment laws

While the majority of small businesses are started by one individual or a limited number of partners, as your firm grows, you'll probably need to hire more employees. Once you have your first worker, your company has a greater obligation to ensure the company adheres to legal requirements.

Laws that affect small enterprises include those that govern working hours, workplace safety, paid time off, and grounds for terminating an employee. Business owners must be aware of employment rules to stay out of trouble legally because ignorance of the law is never an excuse.

This is true regardless of the size of your workforce or the number of employees because employment regulations apply to all business types and sizes. However, the more staff you have, the harsher the consequences will be if you do break the law.

Make sure your overtime policies are clear and that you give advance approval for all overtime. This won't only give you useful financial control, but it may also keep you out of legal issues.

Laws of ethics

Even though ethical standards are crucial, some businesses disregard them because they are so nuanced. This is because many ethics regulations are "coloured in grey", which means that different people can perceive a particular action as ethical or unethical.

But in the corporate world, practically every aspect of the operation - including human resources, finance, contractual agreements, and sales and marketing - is subject to ethical considerations. For this reason, it's easy to see how a firm could infringe a code of ethics without those in charge of the business ever knowing, especially as your company grows.

If a firm breaks ethical regulations, it will probably be punished with a penalty. However, due to the immediate access to information online, an ethical transgression can cause irreparable damage to a company's reputation. If an ethical controversy makes its way to social media, a firm can suffer credibility-wise, and other companies might cease to trade with them.

Laws concerning the shareholders' agreement

It's highly recommended that you have a contract if your company has multiple shareholders. When the company eventually separates or is sold, if there's no agreement in place, legal disputes can arise.

Even if shareholders are getting along well, disputes can always arise; therefore, it's better to leave no room for doubt as to who'll receive what. A specialist lawyer should create the agreement for you, or at the very least, supervise the process.

Laws protecting consumers

Customer relationships are crucial if your business is to thrive, regardless of how big or tiny your business is. These connections are crucial as they can be difficult to maintain; one minor problem could undo years of trust-building.

Additionally, customer protection laws typically benefit consumers rather than businesses because they are designed to shield consumers from unjust or abusive company activities. Privacy rights, liability for goods/products, misrepresentation, and unfair commercial practices are the main areas of customer protection laws. In line with the other regulations mentioned, breaking consumer protection rules could result in a fine, or legal action against the business or business management.

Trademarks and rules regarding business names

Another surprisingly frequent legal problem that small firms encounter is trademarks. Prior to naming or renaming your company or introducing any new products or services, make sure to conduct a thorough study. There's always a risk that if you have an idea for a name, someone else has it too, and it's entirely possible that the other company already has the trademark. Even if it was an honest mistake, trademark infringement isn't the kind of legal pickle you want to find yourself in.

Laws governing intellectual property

Your success depends on having sufficient intellectual property protection. A specialist attorney can provide insightful information about the state of the market and appropriate protections for your ideas and creations. Additionally, a lawyer that is familiar with your business' products and practices can more effectively register extra intellectual property safeguards thanks to their knowledge of the process.

An intellectual property attorney will help you avoid IP theft, whether intentional or unintentional, of items like literature, music, content, symbols, photographs, and designs, in addition to safeguarding your business. This is much more crucial if you contract out the creation of your digital presence to a business that's inexperienced with your industry and brand.

Let's say you commission a designer to build a website for your business. Your website will be protected by an assortment of intellectual property rights. Any branding or logos are likely to be covered by passing off laws or registered trademark rights. Additionally, any database that supports your website will have database rights. However, the majority of your website - including the layout (framed by SITE123 and similar website builders or editors that keep your designs correctly aligned), text, data, graphics, and any broadcasts, music, images, or software - will be copyright protected.

Immigration controls

Due to globalisation, companies are far more likely to receive job applications from people from overseas. Companies should be aware of the regulations that govern the employment of non-citizens and non-permanent residents, as failure to comply can result in substantial. You must ensure any potential employee has the right to work in the UK.

Border control authorities carry out checks. If your company breaks the law, you'll be required to pay a hefty penalty. To avoid legal issues and potentially skyrocketing fines, business owners must ensure that their employees have the right to remain and work in the country.

Conclusion: hire a lawyer

The issues described above are just a few of the potential legal problems that a small firm can encounter during normal business operations. These cases all carry the risk of ruining your reputation and finances. You should take advice from a suitably qualified legal professional. They'll act as your guide and security blanket while you make your way through the minefield that is the small business environment.

Experienced professionals in small business law will have seen almost every trick in the book. Hire only those firms or individuals that can safeguard your business.

Copyright 2023. This post was made possible by Maria Blomgren.

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