Common Legal Issues Faced by Small Businesses: Solutions From a Business Lawyer
The jack-of-all-trades nature of being a small business owner can make it easy to overlook the importance of legal services. Yet, keeping legal challenges in mind and enlisting a business lawyer can help you avoid expensive litigation that can destroy a company.
Every business has regulatory stipulations to comply with, and they are constantly changing. This can distract a small business owner from revenue-producing activities.
Licensing
Licensing issues are a common issue faced by small businesses. When launching a business, ensuring your business practices align with government restrictions for licensing purposes is crucial. Please do so to avoid detrimental fees and even cause your business to be shut down.
Additionally, small business owners must be sure they are not infringing on anyone else’s trademarks. Trademark infringement can be costly for your business and challenging to prove.
As we move into a more global economy, you must adequately license your property. This is important for companies to be able to sell their products in other countries. This can be done through a license agreement where the company grants rights to another company in exchange for a fee. A business lawyer Palm Springs CA can help ensure your licensing is correct for your specific industry and location. Licensing laws can change anytime, so staying on top of these changes is vital.
Contracts
Dealing with contracts is an inherent part of running a small business. From hiring contractors to selling products and services, most business relationships involve some contractual commitment or obligation. These contracts can have goods and services tax implications.
Contracts help a business organize and prioritize its tasks by outlining each party’s rights, responsibilities, and obligations in one document. A well-drafted contract will also ensure that the terms of a deal are clear and legally binding, reducing the risk of misinterpretation or disagreements in court.
The federal government is the country’s largest purchaser of goods and services, and it is required to consider bids from eligible small businesses for contract opportunities. Small businesses are encouraged to pursue government contracts because they provide an excellent opportunity for revenue growth. However, there are specific requirements and complex rules before dating a government contract. A business lawyer can help a small business understand these requirements.
Taxes
Taxes are a significant financial consideration for any small business. Many small companies need help making legal tax preparations, including choosing the right entity type, drafting and filing the appropriate paperwork with the state, and keeping track of tax write-offs and deductions.
The wrong entity type can significantly impact a small business’s liability and tax situation, especially in personal injury or lawsuits against the company. A qualified lawyer can help you establish the correct entity type from the beginning to avoid costly legal disputes down the road.
Pass-through entities are susceptible to federal income tax rates, impacting a small business’s ability to attract investors and capital investment. In addition, proposed changes to the estate tax could significantly impact family-owned and operated businesses. Having a trusted business attorney by your side is essential to help you navigate these complicated issues.
Employment
Small business owners are prone to legal trouble when they fail to follow the best employee relations and hiring practices. For example, hiring employees with nothing more than a verbal agreement or handshake is foolish and exposes the business to potential lawsuits later. It is essential for companies to establish clear employment terms and to document any disciplinary actions. Small businesses also face legal problems when terminating employees, which can lead to costly wrongful termination lawsuits.
Other legal issues plaguing small businesses include terms and conditions policies, trademarks, patents, domain name disputes, sales tax, and more. A business lawyer can educate entrepreneurs on business law and help them avoid these issues. With the help of a business lawyer, small businesses are better prepared to succeed and are less likely to encounter any significant obstacles down the road. Having a dependable and skilled business lawyer on retainer is essential for any small business.