National Entrepreneur’s Day is November 21st, just in time for us all to take a moment of appreciation for the hard work and courage it takes to build a business, before the chaos of the holiday season truly sets in.
Successful entrepreneurs know that covering their legal bases is an important part of helping their business thrive. Although it’s important to consult an attorney on any legal decisions or processes, it’s also crucial for entrepreneurs to have an awareness of possible legal potholes. Here are some ways to avoid legal bumps in the road for your small business.
1. Guard intellectual property
Almost every business has some intellectual property to protect, from trade secrets to original written material. Legal safeguards include confidentiality agreements, trademark registrations, and copyright notices. On the flip side, smart small businesses also need to take steps to make sure they aren’t infringing on other business’ intellectual property, says attorney Waukeshia Jackson of Jackson & Lowe Law Group in Atlanta. Doing the right research up front can save legal headaches later.
2. Make sure agreements are watertight and crystal clear
It may be tempting to jump into doing business on an ad hoc or verbal-agreement basis, especially if friends or family are involved. Taking the time to spell out the exact terms of contracts with partners, vendors, clients, contractors, and employees benefits everyone. This advice extends to general terms of service and policies for everything from the company website to privacy practices.
3. Document all formal activities
Even small businesses need to keep a clear record of organizational decisions and operations. This ranges from recording the minutes of shareholder meetings, to documenting hiring/firing decisions, to accounting of income, expenditures, and other transactions, such as stock transfers. Keeping good records offers protection in case of lawsuits, helps maintain good relationships with business partners, and can keep you out of trouble with regulators.
4. Understand employment law.
Hiring, paying, and firing employees can be a legal landmine, so make sure you know the rules. Different types of employees are subject to different regulations in such areas as overtime pay, and ignorance is no defense if you break the rules. It’s also crucial to understand laws on discrimination, harassment, and other employee issues — and ensure that your company policies support compliance.
5. Don’t try to be your own legal expert.
Consulting with a knowledgeable attorney from the beginning can help you make decisions that will not only offer you legal protection, but also save you money and make for better business. Let an expert do the heavy lifting when it comes to legal issues. Starting with a solid legal foundation will make your business that much stronger down the road.