When launching a company, many entrepreneurs take legal aspects of business conduct lightly, which usually costs them a small fortune in the long run. The commotion in the first few weeks of operation can get the better of even the most meticulous of businessmen, but it’s still not an excuse for you to pay little attention to various legal matters that go hand in hand with running a company. So, what are the major legal issues you may encounter in entrepreneurial endeavors that could sink your corporate ship in a flash?
1. Select ownership model carefully
A properly selected ownership structure is important for orderly operation and legal protection of your business, and it’s also one of the aspects where issues can arise through slapdash model selection. Before you open your doors to customers, it may be a good idea to take the time and analyze different ownership models and risks they entail to avoid unwarranted expenses and legal hassle later on. Sole proprietorships entail maximum decision-making freedom and profits, but partnerships and limited liability companies are a better ownership fit for entrepreneurs who don’t have the funds to launch the business on their own.
2. No trademark infringements
Another issue that can ruin your business if left to the whim of fate, trademark infringement is one of the costliest legal mistakes startups can make. Before trademark registration, you should run a search with the U.S. Patent and Trademark Office and do a comprehensive online research to see if any other brands are listed under that name. The fact that you committed trademark infringement unknowingly won’t make the case any lighter or the collateral less costly. Once you are sure the brand name and logo you’ve selected aren’t subject to copyright, you should take the steps to protect them as your own to prevent trademark theft.
3. Confidentiality is guaranteed
Once you’ve successfully taken your business off the ground, you should make sure your trade secrets are safe. There are several ways for entrepreneurs to secure maximum safety for trade secrets and sensitive information, including confidentiality agreements, data assess limitations, and warning stamps and labels. A failure to protect critical information and intellectual property from nosy parkers can result in exorbitant compensation costs or force you to go out of business should your partners’ or clients’ interests end up compromised. Treat business secrets seriously and take the steps to stay on the safe side of the confidentiality clause on time.
4. Keep your customers happy
Many entrepreneurs have seen their corporate empire collapse over customer care deficiencies, but you can avoid the pitfall with the help of a few simple strategies. To avoid lawsuits that may rob your business of precious funds and reputation, don’t use deceptive marketing campaigns and unfair and high-pressure sales tactics. Although false advertizing ploys can increase business profits rapidly, they’ll also make a strong case for a consumer fraud attorney hired by customers who don’t like to be fleeced. Keeping your thumb pressed to the pulse of your target audience and catering to their needs is safer for your brand’s reputation and long-term sustainability.
5. Your employees matter, too
Your customers should come first and foremost, but your employees should be the next point on your priority list. To stay out of labor unions’ hair, consider hiring employment law experts to draft contracts and other related documents on behalf of your company. It’ll also be a wise idea to invest a little extra forethought into dismissal clause drafting to prevent potential lawsuits for wrongful employment contract termination. In addition to that, it’d be a smart move to make all employment contract terms and conditions crystal clear and keep relevant records safe and at hand in case labor inspection decides to drop by for a quick checkup.
6. Corporate records in order
If you cooperate with contractors, vendors, partner companies or other legal entities in your line of work, you should sign adequate contracts with each of them to stay on the safe side of the law. Ideally, you should have a few different contract types for different situations that may pop up during business conduct, and you should review terms and conditions before each signing to ensure all relevant details pertaining to the project are covered. Also, you should keep contracts and other corporate records in order and review them at least once a year to see if they need to be extended, amended, or renewed.
Keeping your up-and-coming brand out of legal hassle is essential to long-term sustainability and growth. To stay on the safe and law-abiding side of business endeavors, use the guidelines listed above to avoid common administrative mistakes and oversights and costly proceedings they can cause. Good luck!