EntrepreneurBusiness

5 Common Commercial Legal Problems Faced by Small Business

woman on phone-entrepreneur-working from home-meeting-discussion-office

Small businesses are at risk of facing legal challenges at some point in their operations. The most crucial strategy for them is to anticipate and effectively tackle these common commercial problems in a proper way. It is therefore important to invest in legal help on the onset of these legal inconveniences. A lawyer specializing in commercial law can help you overcome all the serious issues that small businesses may face and resolve them in a timely manner.

Here are 5 common problems that small businesses can avoid establishing a legally healthy business.

  1. Licensing

A license must be acquired by any business in order to have its operation lawfully. They, therefore, form the most legal issues that businesses face. It is imperative to ensure that your operations are in accordance with your local authorities’ requirements for business licensing.

When this is ignored, it is highly likely that you will end up paying fines that could have easily been averted. The cost usually varies depending on your operating area, but the fact that it has to be paid is a must.

  1. Trademarks and Patent Issues

Trademark is another aspect that is very common among the legal issues that small businesses may face. When naming or renaming your products or services, do due diligence, and make sure you conduct extensive research to avoid trademark infringements. This problem can be more prone to the tech industry as they often encounter aggressive patent litigations. Some unscrupulous businesses often preserve patents for many years, waiting for another company to inadvertently violates them so as they can get easy cash through copyright lawsuits.

  1. Employees’ termination

It is not uncommon for businesses to hire someone who they thought was qualified than what they really are. Having unqualified staff can be fatal as your business may soon start experiencing losses due to their acts of omission or commission. In some serious instances, these unfit staffs become a burden for the business and must be laid off. They affect business productivity and eventually demoralize other hard-working employees.

However, when the right precautions are not taken before terminating their contract, serious legal repercussions may ensue.

Most challenges come about because all companies have employment contracts that comply with the countries national employment laws. Terminating this contract, therefore, requires a proper procedure to be followed, or else claims of unfair dismissals, breach of contract, or discrimination may soon catch up with you.

Therefore, before terminating a non-performing employee, make sure he is taken through all necessary documents which are drafted by an attorney and make the terms of the dismissal crystal clear for them.

  1. Misclassification

Be certain that all the employees within the business are correctly classified as per the government’s requirements. The most common type of misclassification is where independent contractors are classified as mare employees in an organization. This severely affects not only the worker but also the employer and the economy at large.

This is normally an area which the state takes very seriously, so before any classification, make sure you read all guidelines or contract the labor department in case you are not sure.

  1. Shareholders Agreements

Whenever a business has more than one shareholder, an agreement is strongly encouraged. When a day comes and the business has to be split, in absence of formal agreements, vicious legal battles are likely to ensue. Even if they are in the best of terms today, things may always change in the future and no grey areas should ever exist in regards to who gets wats in the business.

The sure way of avoiding these common commercial law disputes is for businesses to consult legal experts. There is no other way to be certain if your business is clear.

MkIpYjh12dRYuzqSTVU81wD6DUr1PFD 83e02W3KMDAt729V56izJ2tUgB4khUJTZUifoZ0J4 SeQJN5uy1qOqOlkODd2EspyDzeIpRaPZi0JBIaBy9x

Delan Cooper is a writer with years of experience in marketing communication. He enjoys meeting new people and reading more books to get inspired for his own book. Connect with him on Twitter.