The business world can be a tricky place when it comes to understanding and following business law. Many business owners think mostly about competition, product, and marketing when starting their business, but most neglect to consider legal problems their businesses could face. Here are the top four legal problems your business could face.
1. Taxes Or Financial Reporting
One of the most common problems that businesses will encounter are issues with their sales, state, or federal taxes. Often this is not because the business was specifically evading their taxes, but rather because they had lax financial controls. Even though an accounting department or accounting firm may be the ones filling these taxes, they are still ultimately the responsibility of the company and the person signing off on them. The only exception is if it can be proven that the accountants or accounting firm were completely responsible. Businesses may need to enlist a lawyer to prove that there was no fraud committed.
2. Client Disagreements
Problems with clients can often lead to litigation, and some industries end up litigating more than others. It really all depends on your niches of business, but it’s important to be prepared. Businesses that deal heavily with a client’s infrastructure, such as construction companies or engineering companies, may need insurance against such cases and may even want to keep an attorney on retainer to respond to complaints and threats of litigation. Clients are within their rights to sue for any reason, though not necessarily successfully, which can lead to high costs for companies. Lawyers that can negotiate a settlement before it gets to court will be able to save the company both time and money. Do some research on common law suits for your type of business industry, and be prepared for disgruntled clients who might bring similar lawsuits against your company.
3. Intellectual Property Issues
For companies that create their own intellectual property it may be important to keep a lawyer on retainer. Intellectual property is stolen very often and can lead to severe financial ramifications for a company. Companies that outsource work also have to be very important that the intellectual property they purchase has not had its rights sold before, or else they too can find themselves on the wrong side of a lawsuit. Find a trusted Lexis Nexis intellectual property lawyer that can help you both defend you from suits and initiate suits against other individuals and companies. Intellectual property is a difficult and often unclear legal line, so it’s best not to approach these situations without a knowledgeable lawyer.
4. Difficult Employees
Difficult employees can lead to a lot of problems for a business, from false unemployment claims to allegations of harassment or a hostile work environment. Disgruntled employees can especially be dangerous for a business because they can be unpredictable. It can be useful for a business to have a mediation clause in employee contracts. This requires the employee to at least attempt a company-based mediation before attempting legal avenues. Employee lawyers can be extremely important, and it’s also important to keep rigid protocols within a business’s human resources department. With these items in place it should be easy for a business to protect both itself and its employees. Make sure that these policies are company wide and clearly explained to all employees. This will prevent future problems with difficult employees.
This article was written by Dixie Somers. Dixie is a freelance writer and blogger who has written extensively for the business, home, and family niches. She lives in Arizona with her husband and three girls.
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Category: Startup Advice