The Law Can Make Or Break Your Business, So How Well Do You Know It?

If you’ve started a business or have thought about starting one, then your mind will be a flurry of activity, as you try to put your ideas into practice. It’s an exciting time, one that feels it consists of unbound possibilities. This feeling, however, is just a mirage: you do not have unbound possibilities because they are bound by the law.

While the nation does generally try to promote enterprise, there are set rules you’ll have to follow, both to prevent falling foul of the prosecutors and opening up yourself to attach from other companies.

Whenever you do anything connected with your business, remember that you’re not out there alone, trying to make a mark in the world: you exist in a complex system of systems, which relies on everyone playing by the rules to succeed.

Below, we take an in-depth look at the common and not-so-common legal issues that every business needs to be aware of.

Get the Right Structure

You might not be too concerned with the structure of your company, to begin with, especially if it’s just you a couple of employees, but finding out which is the best one for your business as soon as possible will help prevent headaches further on down the line. If you’re not convinced that it’s important, just think about how much your entity decision can impact: how much tax you pay, your liability exposure, and quite simply how much paperwork you have to do.

If you’re looking for a simple ‘set up and go’ type of structure, then a sole proprietorship structure will be best; the requirements are few, and you can be up and trading in no time at all. But there are drawbacks, as there are with all structures. For a clear overview, take a read on how to choose the right business structure, and make an informed decision.

Happy, Open Workplace

If you want to see just how important it is to make sure discrimination has no place in the workplace, take a look at Uber. They had a relaxed attitude towards discrimination, and here’s what happened: they were subject to a sexual harassment lawsuit, more than twenty employees were fired, and the CEO eventually stood down. And this was at one of the biggest companies in the world.

It’s imperative that you have a sound HR structure in place, and stamp out anything that might be considered discrimination at the first opportunity. This isn’t just because of your legal responsibilities; it’s just what a good boss does. Having an office where discrimination isn’t taken seriously will affect your reputation, make for an unhappy workforce, and ultimately lead to a lawsuit that could seriously affect your ability to trade.

Legal Employees

It’s your job to have a system in place to ensure that everyone you hire has the legal right to work. You’re permitted – encouraged, even – to ask for the right documentation to prove that the worker is legally able to work. If they present the documents and they appear to you to be genuine, then you’re in the clear; you’ll have done your duty.

However, if an immigration officer finds that you continue to employ them after you knew they were illegal, you would be liable to pay the associated penalties. If you do want to hire a person who isn’t from the United States and who doesn’t have a work visa, there are legal steps you can take to bring them on board, though this can be complicated.

Employee Issues

Your determination to grow your company, and to use your employee’s skills to fuel that growth, might be one area where you slip up without realising. There are rules surrounding how many hours an employee can work, and also associated pay rises should they work longer hours. Additionally, each state will have its own laws relating to what the employer is required to provide for their employees. Failing to meet these requirements can have hugely detrimental effects on your business, not just from a legal point of view but also with your employee engagement.

Wrongful Dismissal

When it comes to employee/employer relations, the United States generally favors the employer, and as such in most cases, you’ll have few problems if you fire an employee. This is because most jobs are ‘at will’, which means there are no contracts involved and underperforming employees can be fired without a second thought (they can also quit without a second thought, too).

However, there are some scenarios where you’d be best consulting a lawyer before letting an employee go. If there is a chance the termination might be related to discrimination, be it because of race, pregnancy, gender identity, and so on, then the employee could sue. You’ll also be in trouble if you fire someone in retaliation for something, such as blowing the whistle on unsafe practices or because they took time off due to an illness.

Personal Law

It’s important to remember that it’s not only business laws that’ll affect your company: how you conduct yourself will also impact your business success. A messy private legal case, especially one in which involves a crime and is played out in the courts, could spell the end of your organisation, not through any legal way but because of the public’s lack of trust in your credibility. Wherever possible, make sure your private legal matters are not subject to public scrutiny.

Outside of your Control

Following on from this idea, it’s also worth thinking about how matters that are outside of your control might affect your business, too. For example, if you have a car accident – one that wasn’t your fault – and are unable to work to your full capacity due to your injuries. There’s a great site for understanding all your options and legal rights after a motor vehicle accident, written by top-rated New Orleans car accident attorney Keith Magness, which outlines what you might expect to receive in such a scenario. This includes loss of earning, which, as a business owner, would be substantial. It’s important to keep in mind that the law is on your side in more ways than one, and can also affect your business in indirect ways.

Unhappy Customers

Providing a poor level of service to your customers will be bad for business, purely because you’ll get terrible reviews and no repeat business. However, this isn’t the only reason you should strive to do your best; if you’re routinely failing to deliver what you’ve promised and have many unhappy customers, then they might group together and a file a class action lawsuit. Aside from costing you a lot of money in legal fees (even if you win), the suit would irreparably damage your reputation, from which it may never recover.

Talking Bad About Rivals

There is a temptation to talk bad about your competitors, especially in the early days of your business when you’re trying to get ahead. However, remember there’s a fine line between poking gentle fun at a rival and libel. Of course, there is the general umbrella of ‘freedom of speech’, but this will only get you so far. Also, don’t think you can use the anonymity of the internet to spread your message, either: people can be – and have – been traced this way, which can heap a lot of embarrassment on a company as well as get them in legal trouble.

Copyright Litigation

Now, you should already know that you shouldn’t be using other people’s intellectual property without consent, but for many companies, this isn’t the problem: the opposite is. If you’re not protecting your own intellectual property, then you’ll be running the risk of another company sweeping in to take it. You’ll have lost a part of your company, and you won’t have a leg to stand on.

A Safe Workplace

We don’t need to tell you that we’re living in a litigious time. It does not take much for a lawsuit to be filed, but some companies are guilty of making it all too easy. If you have premises where you invite customers, you need to make sure that there is no chance of anybody tripping or injuring themselves. While you should have insurance to cover the costs should it happen, it’s a headache that you’ll want to do without altogether.

Failure to Document

There are no such things as handshake agreements when it comes to business. You need to be writing everything down, documenting every aspect of your company – such as your relationships with other companies, customer agreements, website policies, and so on.

Get a Lawyer

It’s impossible for a small business owner to know what parts of the law apply to them, but they don’t have to: they can hire someone else to know that information for them. Look at retaining a lawyer for your company, so they can be hand to review your actions from a legal perspective.

You can’t account for every law, but endeavor to make the law a priority, and you’ll ensure you’re always on the right side.