Running a small business is difficult enough without finding yourself embroiled in legal proceedings with an unhappy employee, customer or supplier, which could seriously damage your company’s reputation, not to mention your cash flow. It is therefore vital that all businesses protect themselves by ensuring that they have a suitable legal framework in place that will provide support should you find yourself in such a position. When starting a new business, there is a whole host of different matters which require your attention and time, but don’t use these as an excuse to neglect putting in place appropriate legal contracts, as these could be just what saves you from going under when the going gets tough.
Legal documents don’t have to be full of complex legalese, but they do have to be comprehensive, accurate and clearly define the situation and what are the expectations and consequences involved. There should be no room for misinterpretation and certainly no contradictions or uncovered areas. This is particularly important when it comes to the terms and conditions of employment, as you don’t want to find yourself facing an unfair dismissal lawsuit because you haven’t covered yourself adequately. There are many companies out there now who are eager to represent disgruntled employees and find loopholes in their contracts.
Another area where you want to be careful is when it comes to the products and services that you are offering. It is important to check that you are not in breach of any copyright or patent trademarks and laws, so make sure that you research everything thoroughly before you get started. You could genuinely think that you have come up with a marvellous new invention, only to find that someone else had thought of it already (and protected it), leaving you open to court cases, potential fines and even a prison sentence.
Even with the best legal documentation in place, you should still make sure that you have the right business insurance to cover you in case you do have to face legal proceedings. Without the right cover, you could find yourself unable to pay the legal fees that would save your business, meaning that you could suffer financially anyway even if your case were successful. Depending on how you have registered your business, your personal finances and assets (such as your home and car) may also be under threat, so getting the right kind of business insurance is imperative.
To avoid getting into a situation like this, you should do everything you can to make sure that your business is legal and ethical. It is not enough to think that you are operating a good business, but also to make sure that you are covering yourself with comprehensive legal documents, thorough research and the right policies and procedures in place. It is not enough to say that you didn’t know you were doing something wrong either – it is your responsibility to make sure that you know what you should be doing and to deal with any situations that should arise as quickly as possible.
