Businesses face an array of legal issues. It is helpful for business leaders to prepare for these issues by having at least a basic understanding of some of the things that could go wrong. Knowing what to watch out for and, ideally, taking proactive measures to reduce the risk of a legal issue can help to better ensure business operations are not interrupted. Some of the more common legal issues that impact and potentially interrupt a business can include:
#1: Incorporation
Arguably one of the most important legal decisions business owners will make is one of the earliest. Deciding whether a business should incorporate as a limited liability company (LLC) or one of many corporate forms will impact the business owner’s liability, the business’ finance, and funding options as well as tax obligations.
#2: Employment agreements
Contracts are big part of business, and employment contracts can be loaded with legal landmines. Should you include non-disclosure or non-compete agreements? If you do, will it survive a legal challenge? It is important to make sure these agreements meet current requirements or else they may not provide the protection you need.
#3: Compliance
Regulations are present at local, state, and federal levels. The regulations that apply to your business will depend on your business model. Businesses that bill Medicare will need to follow healthcare fraud laws, those that sell goods will need to follow the laws of commerce and those that work with dangerous materials may fall under strict environmental regulations. A failure to follow applicable regulations can result in hefty fines and even, depending on the alleged violation, criminal charges.
#4: Business succession
You cannot remain at the helm of business operations indefinitely. A succession plan can help smooth the business’ transition into the future.
Business owners can mitigate the risk of legal woes with a proactive approach. You do not need to address these issues on your own. Instead, you can delegate the matter to legal counsel to advocate for your business’ interests on your behalf — leaving you free to focus on other business matters that require your attention.