Small business owners play many different roles that contribute to the growth and development of their business. While undertaking these various responsibilities, business owners are also required to understand the threats that could cause their business’s ultimate failure. It is necessary that small business owners take the initiative to protect their business before legal issues arise.
Understand the Laws that Affect Your Small Business
Having even a basic understanding of the laws that impact the daily and long-term operations of a business is the first step to avoiding legal problems. There are various areas of law that a small business owner should be familiar with in order to ensure that their business is compliant with federal and state regulations. These include:
- Employment Law: There are various employment regulations that business owners must adhere to if they have employees, or if they are planning to hire. Understanding the differences in employee classifications and labor requirements is essential to meeting federal and state employment standards.
- Tax Law: One of the first decisions that affect every business is related to business structure. Business owners must understand, however, that this structure not only affects the liability, ownership structure and profit distribution of the business but the yearly tax requirements of their entity as well. Tax laws can have a significant effect on a business’s operations and performance, and these regulations consistently change. If you are a business owner, do not neglect to educate yourself on existing and emerging tax legislation.
- Intellectual Property Law: Intellectual property plays a vital role in many businesses today. If your business produces a product or provides a service, patents, trademarks and copyrights provide the protection that you may need to keep your business growing while dissuading copycats or imposters. Understanding your rights as governed by intellectual property law can save your business substantially in the long-term.
Put Everything in Writing
Regardless of whether a business is performing a service, hiring a new employee, contracting with another business or bringing on a new partner, it is important to make use of legally binding contracts that explicitly detail the terms of an agreement. Simply taking the time to put an engagement on paper can save substantial business resources if the engagement goes awry or if legal action ensues.
Obtain Legal Counsel
Businesses are affected by many areas of law. Regardless of how prepared and knowledgeable, a business owner becomes, there will always be minute legal hiccups that can evolve into large obstacles for a business if they are not dealt with properly. It is always advisable to speak with experienced business attorneys or advisors when there is a degree of uncertainty regarding the law or the legal effect that an action could have in the future.
The Baltimore small business advisors at the Law Offices of Eldridge and Nachtman have extensive experience advising small business owners in various matters. EN Lawyers offers an array of business advisory services, including comprehensive business start-up consultation, business document review, and business document drafting and creation. Contact us for additional information about how to protect your small business, or to schedule a consultation with one of the EN Lawyers small business advisors.