3 Legal Considerations for Business Owners
Business owners have a substantial amount of legal issues they must address as they establish and maintain their companies. If these issues are not tackled in a systematic fashion, owners can lose a great deal of money and miss the chance to partake in lucrative ventures and other profitable opportunities. Some entrepreneurs hire lawyers before starting their enterprises because they are well-aware of how much legal work needs to be done in a business setting. Check out this list of three legal considerations for business owners.
1. Business Structure
There are different kinds of business legal structures. A sole proprietorship is one where an individual acts as both the owner and staff of a business; this kind of structure is very easy to operate. A corporation is much more complex than a sole proprietorship; shareholders, who hold stocks, own the corporation and make major decisions concerning its future. Partnerships are owned and run by two or more people. A limited liability company is comprised of a mixture of the elements of a corporation and those of a sole proprietorship or partnership; the owners within this structure are not personally responsible for the company’s debts.
2. Written Agreements
There are a plethora of legal-binding agreements a small business owner must craft. Such agreements may include operating, partnership, permanent employment, fixed-term employment, casual employment, vendor, and supplier contracts. Oftentimes, lawyers will be present during the negotiations that occur before many of these agreements are finalized and signed. The language used in these documents has to be very precise and all-encompassing, leaving no room for ambiguity since that can lead to disputes and financial problems.
3. Intellectual Property
Intellectual property rights protect original ideas, methods, and products. Trade secrets, such as secret recipes and formulas, are covered by intellectual property law. Trademarks, such as business slogans and logos, are also covered. Exclusive and creative works, such as images, songs, and software, can be copyrighted. Inventions can be patented; utility patents address the usage of particular items while design patents deal with their appearance. A small business owner that fails to acknowledge intellectual property law renders their creations vulnerable to replication. This weakens their ability to monetize their own products and services.
By taking any and all legal matters into serious consideration, business people are able to ensure the success of their companies. They are also able to protect themselves from lawsuits and tax violations.