Starting a business can be an exciting and rewarding experience. However, it isn’t without risks.
Small businesses must follow all legal requirements to avoid penalties and costly legal disputes. Having preventative legal measures like obtaining business insurance and properly screening employees can help protect against potential issues that can occur during the operation of a company.
Licensing
Depending on the type of business, a small business may need to obtain licenses or permits. A good lawyer from Linden Law Partners should be able to advise clients on whether any statewide or local licensing is required.
Licensing is one way small businesses can expand and diversify their operations without investing in new production lines and marketing campaigns. A licensor, however, will want to ensure that the licensee is financially sound and has sufficient manufacturing capacity before entering into a licensing agreement.
Small business owners often enjoy a great deal of independence and can be more flexible with their hours than employees in larger companies. They also tend to be more involved in their communities than employees in large corporations, and they can sometimes offer benefits that are not available in larger businesses, such as health insurance and free legal services.
Business Structure
Choosing the proper legal business structure is a major decision with significant tax and legal implications. A lawyer or accounting expert can help small business owners choose the best design for their business idea and goals, then ensure all government paperwork is correctly filed.
Failure to do so could result in fines and even the business shutdown. The same goes for intellectual property issues, including ensuring the proper copyright and patents are in place to protect unique products or marketing plans. Small businesses must also know compliance issues, such as worker classification and tax laws. This is another area where a good lawyer can help a small business avoid costly mistakes.
Taxes
The legal structure of a business has significant implications for how tax dollars are managed and liabilities are handled. A lawyer specializing in small business law can help you decide how your company should be structured and what type of tax status to choose.
Regardless of size, every company must adhere to state and federal laws regarding taxes and accounting issues. Working with a tax attorney can ensure your business complies with all laws.
Keeping clear, organized financial records can reduce the risk of lawsuits and legal issues. For example, keeping personal and business accounts separate prevents the appearance of commingled funds that could lead to IRS audits. It can also protect you in a natural disaster or data breach.
Employee Issues
As a small business owner, you should understand employment regulations and laws to avoid costly violations. Examples include minimum wage, overtime, worker’s compensation insurance, and anti-discrimination laws. An HR professional can take point on these and various other employee-related tasks, freeing up your time to focus on your business operations.
Another common issue for small businesses involves taxation, including self-employment taxes and sales taxes. An accountant or bookkeeper can help you stay on top of these requirements to avoid fines and back taxes. Intellectual property issues are common, especially for tech companies and e-commerce businesses. A qualified attorney specializing in small businesses can assist you with trademark, copyright, and patent laws. These protect your unique branding, logo, and business name from unfair usage.
Patents
In the business world, patents are a form of intellectual property protection that allows businesses or manufacturers to control and limit the use of a product or method. If your small business has created a new device, process, or tooling that could benefit other companies in your industry, consider seeking a patent.
Employment Issues
If your company employs employees, a lawyer can help you draft agreements that include enforceable and legally sound terms. In addition, lawyers can advise you on compliance with employee compensation, benefits, and worker safety laws.
A good business lawyer can also help your company avoid issues related to nondisclosure agreements or unauthorized competition. A business attorney can provide a negotiation checklist to prepare you for meetings with potential clients or other businesses in the marketplace.
