Are you unknowingly making legal mistakes that could have major consequences on your business’s future?
Running a business means you will have a lot on your plate.
With so many tasks to juggle from managing employees to overseeing operations, it can be easy to push legal issues to the side.
Ignoring these issues, however, can have serious consequences.
In this blog, we will discuss some of the most common legal mistakes businesses make and how to avoid them:
Wrong Company Structure
Your company structure determines your personal liability, tax and management responsibilities. Choosing the wrong structure can lead to liability and tax issues down the road. Consider consulting a legal expert to give you advice on how to best protect your interests before deciding on a structure.
Failing to Use Written Contracts
One of the biggest mistakes you can make is not putting your agreements into writing. Written contracts help to protect your business by ensuring that you can enforce your rights and help prevent disputes. The terms of the agreement are clearly outlined with your rights and responsibilities alongside penalties for non-compliance.
Ignoring Employment Laws
There are multiple employment laws business owners must comply with including health and safety regulations and anti-discrimination laws. Failing to comply with these laws can lead to legal action. If you have any questions regarding employment law, please seek legal advice.
Not Keeping Proper Filing Systems
Poor record-keeping makes it harder to keep track of business activity inhibiting your ability to assess how well your business is performing and make decisions. Install a proper filing system to maintain structure or consider using a digital filing system for your documents. Digital software can allow you to access your documents from anywhere while keeping them secure.
Overlooking Tax Obligations
Failing to pay your taxes or file returns on time can lead to strong penalties or legal action. You need to learn your tax responsibilities to understand which taxes apply to your business. Consider hiring an accountant to help you file your tax returns on time.
Inadequate Insurance Coverage
You never know what may happen in the near future. If an unexpected event occurs and you lack adequate insurance coverage, it could result in financial ruin for your business. Do not hesitate to consult an insurance expert to determine adequate coverage for your business.
Failing to Protect Intellectual Property
IP protection ensures that your branding, ideas and content are safe from unauthorised use. You can do this by trademarking and copyrighting your brand and content. Also, consider applying for a patent to protect your innovations.
Lack of Legal Counsel
Legal counsel can be easy to overlook if you are trying to save money and time. However, legal counsel can help you better navigate tricky legal issues and save you from future headaches. Do not hesitate to consult a lawyer for legal issues; instead, consider it to be a good investment.