Small businesses already have a lot going against them. Even as they strive for success, many unexpected setbacks can occur. Legal issues are a particular setback that is rather challenging for small businesses to overcome. In order for entrepreneurs to stay out of legal trouble, it’s helpful to know a few basic laws.
Laws for Small Businesses
Try as they might to stay on the right side of the law, small businesses will face some legal issue at one point or another in the life of their business. Most small businesses end up facing lawsuits or other issues that could have otherwise been avoided if the owners had a prior understanding of basic law. Read on for three laws that every small business owner must know,
1. Trademark Law
While a larger company has the resources to handle legal issues that come up, smaller businesses that aren’t aware of trademark law won’t always be so lucky. Oftentimes, an unexpected lawsuit or cease and desist letter may mean the end of a small business. This is why having a basic knowledge of trademark law is important for all small business owners.
Regardless of the type of business or industry, an entrepreneur will eventually choose a business name, logo or motto. Once the name, logo or motto is chosen, business owners that aren’t aware of trademark law often make one crucial mistake. If a business fails to register these things or ensure that they are completely unique to that business will likely be on the receiving end of a “cease and desist” order. If the situation escalates, a lawsuit may be in order.
This unfortunate situation can be avoided with basic research. Business owners must check the website for the secretary of state in their area. Then, they should file a Doing Business As form for their business.
2. Tax Law
Tax season can be a trying time for both employees and business owners alike. Entrepreneurs especially need to ensure they are well-versed in tax law. Far too many people file their taxes improperly, resulting in significant consequences for their business.
Take some time before tax season to read up on what the IRS requires for your type of business. Make sure you know which forms to use and what to include as you file your taxes. For extra legal protection, entrepreneurs would do well to seek the advice of a tax expert.
3. HR Laws
Many small business owners are used to running their company with themselves as the only employee. When the time comes to hire on new employees, these business owners often aren’t aware of the basic HR laws that they need to follow. This can result in serious legal trouble for these businesses.
The most efficient way for entrepreneurs to tackle all issues relating to HR law is to hire a human resources expert. Without an expert in place, business owners may find themselves on the wrong side of the law when it comes to what they can and cannot do. Even when performing basic human resources responsibilities like hiring, firing, and communicating with employees, business owners can cross the line without even realizing it.
While having an HR expert will certainly protect the rights of employees, HR experts are also essential for protecting the rights of the business owner. In the event of a wrongful lawsuit, a business owner will want to make sure that they are on the right side of the law and that they have the paperwork and evidence to prove it.
The law is in place to help businesses succeed. By familiarizing themselves with business law and their legal obligations, business owners will be better prepared for the legal uncertainty of the future.