{"id":24808,"date":"2016-11-07T13:45:31","date_gmt":"2016-11-07T17:45:31","guid":{"rendered":"http:\/\/www.andysowards.com\/blog\/?p=24808"},"modified":"2016-11-07T13:48:18","modified_gmt":"2016-11-07T17:48:18","slug":"legal-mistakes-business-cant-afford","status":"publish","type":"post","link":"https:\/\/www.andysowards.com\/blog\/2016\/legal-mistakes-business-cant-afford\/","title":{"rendered":"Legal Mistakes Your Business Can’t Afford"},"content":{"rendered":"

When you first set out and start your business, you\u2019re likely to have all kinds of things on your mind. You\u2019ll be bursting with creative ideas for your branding, visions of how you\u2019re going to make a splash in your industry, and probably more than a few plans for what you want your executive office to look like! One thing which countless new entrepreneurs manage to neglect is the various legal concerns which come with running a business. If you don\u2019t spend enough time chewing over the legalese applying to your business, it can really come back to bite you, and sink your whole operation before it gets started. To make sure you don\u2019t shoot yourself in the foot, here are some of the biggest legal mistakes you have to avoid in those early stages.<\/p>\n

Find The Right Legal Structure<\/h3>\n

First of all, a lack of incorporation. It would be pretty near impossible to count the number of entrepreneurs who have failed to establish the correct legal structure for their businesses. This can cause major issues when you\u2019re trying to bring in outside investors, one of the founders leaves, or even worse when you get sued by an employee or customer. When you haven\u2019t established the correct legal structure, you open yourself, and possibly a lot of your upper management, up to personal liability. This can mean all kinds of damaging legal issues, so make sure you\u2019re not putting this important process off! Read up on incorporation<\/a>, and determine whether your best legal structure is an LLC, C or S corporation.<\/p>\n

\"the-details-behind-starting-an-llc-for-your-small-business-part-1\"<\/a>
\nThe Details Behind Starting an LLC For Your Small Business \u2013 Part 1<\/em><\/p>\n

Another huge blunder is operating without an official shareholder\u2019s agreement. You\u2019ve obviously got a grand vision for the future of your business. However, you still need to consider the possibility that you\u2019ll eventually want to sell the business, or that one of the founders will leave. When either of these things happen, you\u2019ll need a shareholder\u2019s agreement. This will guide everyone\u2019s actions, and avoid any tumultuous disagreements or other confusion. Before you stimulate any more rapid growth, sit down with a good commercial lawyer<\/a> and draft one of these agreements. Make sure the documents cover how any issues between shareholders will be settled, and what will happen should one of them leave, die, or get divorced.<\/p>\n

\"big-legal-mistakes-made-by-start-ups\"<\/a>
\n10 Big Legal Mistakes Made By Startups<\/em><\/p>\n

Another legal mistake which you can\u2019t afford to make is operating with no HR guidelines. At any business, you\u2019ll have certain things which you\u2019ll expect your employees to do and not to do. Some of these might seem obvious to you and your management. However, in the eyes of the law, if you haven\u2019t set it all out in writing you might as well have not set it out at all! There are countless cases of young businesses being bankrupted after an unfair dismissal case. If you terminate an employee for breaching a rule you have, but that rule isn\u2019t set out in writing, then you could end up living through this kind of nightmare as well! Employment law and HR<\/a> are pretty complex topics, so bring in a professional, or invest in some well-reputed HR software. This will help you to formulate airtight, codified HR policies<\/a> which work well for the company.<\/p>\n

Cover Your Assets<\/h3>\n

Libeling the competition is another serious blunder which every business needs to steer clear of. I\u2019m not saying you can\u2019t say that you\u2019re better than your closest competitors. I\u2019m just saying you have to be careful about the way you do it. It\u2019s obviously going to be very tempting to talk some trash about your closest competitors, whether in your marketing materials, on social media, or through any other communication channel. However, doing this can often bring you dangerously close to breaking the law. The legislation surrounding libel and slander<\/a> can be hard to understand, so the best way to cover yourself is talking to the lawyers. Whenever you\u2019re planning to say something public that may cross the line, be sure to talk to a corporate lawyer. They\u2019ll be able to explain what\u2019s libel and what\u2019s freedom of speech.<\/p>\n

\"Lawsuit<\/a>
\nWhat I Learned from Fighting a 12-Month-Long Lawsuit<\/em><\/p>\n

Neglecting copyright, trademarks or patents will also drive your business into the ground if you\u2019re not careful to avoid it. Every minute that goes by where your intellectual property is unprotected, you\u2019re running the risk of another, less creative business owner stealing it. Well, \u201cstealing\u201d isn\u2019t the right word, because them taking your idea will be totally legal! A lot of different things come under the category of \u201cintellectual property\u201d, and you may be finding it difficult to keep track of it all. If this is the case, talk to an experienced lawyer and seek their help in taking inventory of the business\u2019s intellectual property.<\/p>\n