If you are running or even starting a business, you have to ensure that you are operating it within legal boundaries. This might seem like a difficult thing to do and an inconvenience, but it is imperative to maintain a profitable and, more essentially, an existing business.
Besides, encountering legal issues in your company will not just cost you a few dollars, but you can also get your business license forfeited. Therefore, you should ensure that you work with the law to avoid these consequences, hefty liabilities, or even jail time. As a business owner, you also need to understand the laws that surround your business.
Best ways to Protect your Company from Legal Issues
The problems your company can face for not complying with the law are complex. Additionally, legislation is different in most countries; therefore, what makes a crime in one place can be legal elsewhere. Consequently, you must have the necessary knowledge of the local laws related to running a company, from taxes to employee recruitment.
Know the regulations
There are many laws that your business must abide by, from taxes to environmental protocols. In fact, these are the things that should come up front, considering the consequences of not complying. Therefore, it is your duty to be conversant with all the laws and regulatory policies on every level. In addition, educating yourself about the laws related to your business can help you a lot. So, ensure that you learn as much as you can about corporate governance and business structures.
Intellectual property is vital
Intellectual property is a comprehensive definite description of all the intangible assets owned by your company, legally protected from unauthorized use. This is mostly all the non-physical assets that your company owns.
IP holds a high value in the current knowledge-based economy; therefore, companies are meticulous when it comes to pinpointing and protecting their Intellectual property. Intellectual property can be classified into copyrights, patents, trademarks, trade secrets, and franchises.
That said, one of the best ways to protect your intellectual or intangible property is by getting explicit. Ensure that your employees, contractors, and anyone else working closely with your company signs a confidentiality agreement.
On the other hand, you must ensure that you have grown your business brand, name, logo, and trademark from the ground to avoid getting into some legal issues. In addition, ensure that you are not using symbols that are already owned and registered as intellectual property by other companies.
Avoid data breaches
In this age where high-profile companies are susceptible to cyber-attacks and hackers, protecting all your customer’s information is very important. A data breach can hurt your status, drain your accounts and result in fines and penalties. Therefore, to protect your business from data breach lawsuits, you have to put some specific measures in place. For example, you can train your workers and clients, encrypt sensitive data and update your antivirus software and firewall. In addition, before you share any customer information or using customer data for business purposes, ensure that you have their consent; here are some GDPR consent form examples.
Be careful with business contracts
It can be challenging to write contacts for private contractors, employees, or even a single party that your business cooperates with. But contracts are essential when it comes to avoiding legal issues in your company. Ensure that any contract or agreement you sign accounts for various situations. Makes sure that there is no room for clarification by learning how to negotiate with the co-signing party to add as many facts as needed.
And if you feel that there is a part you don’t understand or doubt, have a lawyer look over the contracts. Have your lawyer ensure that there are no possible loopholes that can be used by someone to exploit you and your company.
Luckily, there are some ways to simplify the contract drafting process. You can craft a few impermeable contract prototypes that can easily be adapted into every new partnership. Keep in mind that running your business and collaborations without a proper and well-drafted agreement is a recipe for calamity.
Avoid employee-related issues
Employees are getting hard to keep up with, primarily due to the changing legal policies. Some of the many legal aspects to consider are employee classification, employee termination, discrimination, immigration audits, information sharing, health& safety, and the use of electronic devices.
Employee classification is crucial to defining any new employee’s status to establish a legally binding contract. For example, will the employee be working full-time or as an independent contractor? The worker’s status will impact the employee contract that sets out necessities on various employee aspects, for example, specific employee rights like paid overtime, benefits and minimum wage, and job details.
On the other hand, dismissing an employee can raise some legal problems if not done legally. In some cases, you might even be sued for wrongful termination. Reasons for employee termination might include, Misconduct, underperformance or retrenchment. As the employer, you are obliged to give a notice of termination and provide enough information. The notice you give a worker will depend on the amount of time they have worked at your company.
In addition, you have to consider the health and safety of your employees to avoid legal issues in your business.
Hire the right lawyer
It is essential to find the best lawyer who will help you understand the complexities of some legal processes. The lawyer will give you a simple understanding and advice to ensure that you are lawfully running your business.
Therefore, ensure that you ask for referrals from other business owners. Alternatively, you can search for law firms in your local bar association. By doing this, you will be hiring the best person for your legal department.
The Bottom Line
Owning and running a successful eCommerce business or even a physical company comes with countless responsibilities. Therefore, you must stay up to date on all the legal facets that relate to your business. You will then increase your self-confidence as an entrepreneur and develop the capacity to handle unpredictable situations and legal issues.
Remember that any legal problems can damage your reputation, drain your account and even stop all your business operations. So, ensure that you are practical when it comes to reducing the risks. And even if you are faced with a business lawsuit, you will have the defensive measures to overcome all of them without harming your company’s reputation.
Image Credits: Fathromi Ramdlon