Believe it or not, business owners are arguably the people on the planet most susceptible to legal issues.
When you consider the various hurdles and day-to-day duties of the average enterprise, though, the reason why businesses are burdened by legal red tape is clear. For example, consider the following points:
- Regulations are constantly evolving: if businesses don’t stay on top of regulatory changes and the respective hoops they need to jump through, they’ll quickly find themselves in hot water
- Constant interaction between parties: the more clients and customers you have on deck, the greater likelihood of something going wrong somewhere
- Transactions go hand in hand with legal issues: especially if your company has a serious bottom line, legal battles will inevitably ensue over payments
Simply put, such snafus are a matter of “when,” not “if” as your business grows. Even if you think that you’re doing everything by the book, it always pays to revisit some of the most common legal problems that plague today’s companies.
But what do those problems look like and what can you do to prevent them? Together, we’ll break down six of the most common pieces of red tape to look out for.
Dealing with Audits
Having someone else essentially define whether or not your business is complying with regulations can be a nerve-racking experience. Don’t look at audits as gloom and doom but rather as a way to ensure you’re running the best business possible.
From understanding the different types of audits you should expect to familiarizing yourself with risk and compliance software, you shouldn’t totally blindsided by any given audit, though.
The Fine Print of Interns, Employees and Contractors
Bringing on talent as a growing business can be a thrill, but it can also be the source of some major tension.
For example, you really need to dig deep when it comes to employment laws in regard to hiring interns. While it may be tempting to source out “free” work, there are oftentimes limits to what you can and can do with talent that’s unpaid.
Additionally, you need to be careful in terms of security and safety when dealing with employees and especially contractors. To prevent yourself from potentially losing trade secrets or compromising company information, make sure you speak with legal counsel to write up airtight contracts for anyone you’re looking to bring on.
Filing Business Taxes
Taxes are inherently complicated and filing taxes as a business, either big or small, is no different. Just as you want to have a close relationship with a lawyer, business owners should trust their accountant to both spot deductions and avoid anything that could potentially resemble fraud. Getting caught up in not only a total nightmare but also a bad look for your business.
Handing Revenue Shares
Budding businesses are oftentimes expected to offer revenue shares to employees, especially as an incentive to keep star talent around for the long haul. That said, you need to mind who you’re offering shares to and what the revenue structure looks like (for example, you need to define if you’re sharing total profits or pieces of individual transactions).
Again, speaking to a lawyer can make this process a lot less daunting if revenue sharing is something you want to offer.
Intellectual Property and Copyright Law
In an era of doing business that sometimes seems to be defined by the concepts of “beg, borrow and steal,” understanding intellectual property law is arguably more important than ever. This is especially true if you’re primarily operating online and want to avoid being accused of stealing anyone’s ideas or content.
Just remember that copyright law doesn’t protect ideas outright, so it’s also a smart move to keep your next big move private to avoid conflict with businesses and other employees alike.
NDA’s and Non-Compete Clauses
Last but not least and on a related note, having paperwork in place to protect your business’ intellectual property is a nice safeguard against someone stealing from you. While we don’t want to think the worst of our employees, having everything from employees to contractors sign non-disclosure and non-compete agreements are rather commonplace today. Likewise, anyone you bring on likely be familiar with such documents and have no problem agreeing to them.
Running a swift business means having all of your legal bases covered. While this might seem like a lot to keep in the back of your mind, simply having a pulse on these issues is a starting point toward long-term protection for your company.
The final takeaway? The more you know about potential legal issues, the better.