Although you don't need a law degree to successfully operate your company, you do need to stay on top of the legal ramifications of small business ownership.
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Sometimes that's easier said than done, but turning a blind eye to the following key areas can have devastating legal consequences.
General Business Law
Business law is a broad, yet highly-nuanced field. However, a general awareness of business law is an absolute necessity for every entrepreneur. The best to stay abreast of business law issues is by networking with other entrepreneurs, browsing through small business periodicals, and asking questions when you encounter something you don't understand. The awkwardness of asking a colleague to brief you on a business law topic is small compared to the expense and hassle of enduring a protracted battle in court.
Businesses are legal entities. However, since not all businesses are the same, the manner in which your business is structured will significantly influence its legal status. For example, in many areas the law treats corporations differently than sole proprietorships. In addition to becoming knowledgeable about general business law, you will also need to educate yourself about the legal consequences of your company's business type.
Trademark and copyright law is a specialized field of business law, designed to protect and govern intellectual property. Whether you know it or not, your business has intellectual property that's worth protecting. Unless you think it's a good idea to make your company's name, marketing campaigns, and products available in the public domain, you need to learn as much as you can about trademark law and take the appropriate steps to inoculate your business from theft.
Every now and then, it's smart business to conduct a legal review of your company's policies and procedures. Laws change over time, and a policy that was legally compliant five years ago might need to be modified to reflect current laws. This is especially true of policies related to hiring, firing, and other sensitive topics. You can begin this process on your own, but be aware that you should ultimately enlist the aid of a legal professional to make sure your modified policies are fully compliant with current laws.
Most small business legal problems can be avoided by taking the time to implement some basic preventative policies and procedures. Worker safety has the potential to create a legal fiasco of massive proportions, but proper training and safety policies can mitigate your risk and protect your company from future litigation. If you don't currently have prevention policies in place, some other areas to be concerned about are sexual harassment, substance abuse, and employee confidentiality.
You probably wouldn't think about representing yourself in criminal court, so why would you consider trying to handle your company's legal matters on your own? Competent legal counsel is critical to the legal welfare of your business. All legal documents – no matter how insignificant they may seem – should be reviewed by your attorney before they are finalized.