Legal Issues for Small Businesses

There are many resources for legal advice and information available on the Internet. If you think that you need professional legal advice consulting a lawyer is the best course of action. But here are a few common legal issues that you may come across.

For most business transactions you want to create and sign a contract. Contracts or service agreements allows you to define what your services or products entail. Service agreements are an important way that you can protect yourself and your business. Don~t overlook this important aspect of small businesses.

In each service agreement you should list in detail what your service encompasses. Be very specific and don~t leave anything out. A signed contract is a very important legal document and can stand up in court. Also be sure to add what is considered an extra service and what the charges would be. Make sure that you don~t leave anything out of your service agreement.

At some point you may need to hire or fire employees. Many small business owners are unaware of their rights and their employee~s rights. Even though you may only have one employee it is important that you are well versed in labor standards and other regulations. If you need to terminate one of your employees it is vital that you do it properly.

In order to avoid unlawful discharge law suits carefully select your employees and read up on the proper procedure for terminating employees. This may be a situation were you should immediately contact a corporate attorney.

Hiring Independent Contractors ~ To avoid some of the hefty labor taxes, small business owners hire Independent Contractors to take up the slack. IC~s (Independent Contractors) are responsible for claiming their income and expenses and filing with the IRS.

Even though you may have hired an independent contractor the IRS may consider their job to be that of an employee~s. This means things could get complicated for you. Be sure to check what the IRS considers employee~s jobs before hiring an independent contractor.

If you own a small business with someone else you need to know about the legal definitions of your partnership. If you~re a sole proprietor this means you own the business yourself and can be held legally responsible for anything to do with your business.

A better choice would be to start a business as a limited liability corporation. This means that if your business is sued, any personal finances and funds can be excluded from the ruling.

Intellectual property issues should be of great concern to any business no matter what sector you are in. This means you need to understand copyrights, registered trademarks, invention assignment agreements, and confidentiality agreements. Protect your company and its property.

If you don~t want problems with the IRS, good record keeping and accounting is essential. You can cause serious problems for yourself and your company if you don~t keep records of all business transactions.

You may want to hire a bookkeeper or accountant to deal with accounting issues. If you can~t afford to do so be sure to take a course on business accounting to ensure you have proper records of everything.

At some point you may need to consult with an experienced corporate attorney. While most attorneys do charge a high fee, there are many situations where it may be necessary to do so. Sometimes there~s no substitute for professional advice.

Be sure to find an attorney that you~re comfortable with since you may need his or her services in the years to come. It may be wise to meet with several attorneys before you choose one. If you are at all unsure about any legal matter be sure to consult your attorney. Errors when it comes to your business~ legal issues are sure to lead to disaster.

Nyall Bakk is owner and operator of Advertising WorldWide, Inc, a fantastic resource for information about advertising