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The Main Legal Issues Most Small Businesses Face

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Sooner or later, all small businesses will face a legal problem. It’s almost inevitable. Whether a former employee launches a bogus sexual harassment claim or a sub-contractor fails to meet their contractual obligations and blames you for the delay, experienced legal representation is essential.

The Right Business Structure

If you don’t know the difference between a limited company and a partnership, now is the time to find out. The right business structure is essential. It could make the difference between you keeping your home and other personal assets – and ending up on the streets. Speak to an expert if you need advice. Your accountant and business solicitor will be able to guide you.

Contract Law Disputes

Not all small businesses bother with contracts. They agree to do a job and don’t bother putting the finer details down in writing. But this is a mistake. Whether you are building a single-storey extension for a residential client or sub-contracting out the piling on a multi-million-pound bridge project, a contract protects you and the client.
You can’t do a thing about a dispute without a properly drafted contract. Contracts are there to document your legal relationship with everyone involved in the business process. Contracts state when payments are due, what happens if someone in the contact doesn’t fulfil their side of the agreement, and every last detail related to the job.
Contract law is a specialist field, so it makes sense to consult with a legal professional rather than writing a DIY contract based on an online template. Talk to a business solicitor from a national commercial law firm, for example, Harper James Solicitors, if you need advice on contract law.

(C) Michael Coghlan cia flickr.com

Intellectual Property Issues

Intellectual property can relate to all kinds of things, from software your business creates to your website content. Unfortunately, because intellectual property isn’t a physical thing, it is hard to protect it from theft. Intellectual property could make the difference between your business becoming a market leader or losing market share to a competitor.
Whether a competitor steals your copyrighted designs or an employee with a grudge walks out the door with your database of clients, you should always seek professional advice if you have an issue with anything related to intellectual property.
It’s a good idea to protect your intellectual property with a patent or registered copyright. Keep this in mind when you are developing new products. The last thing any business needs is a competitor bringing a new product to market that is an exact replica of something you have been developing in-house for a year. The duplication may be innocent, but if you don’t have the correct patents or copyrights in place, you don’t have a leg to stand on, legally speaking.
This issue is especially important for tech firms, where research and development run at a faster pace than in other niches.

Hiring, Firing, Discrimination and Harassment Cases

Unless you’re a sole trader, your business will have employees and eventually, you’ll have some issues to deal with. These issues can vary in toxicity and seriousness, from a wrongful termination suit to an employee claiming they were sexually harassed by you in the workplace.

It’s important to remember that all employment cases need to be dealt with expeditiously. Any whiff of a scandal could seriously damage your business’s reputation, not to mention your personal standing in the community. For example, imagine if a former employee alleged racism was at the heart of their dismissal? This is the kind of claim that grows wings and ends up being covered in the local press. There is a saying that all publicity is good publicity, but in cases like these, there definitely is a line in the sand!

You can minimise the chances of claims arising by ensuring your human resources department (if one exists) is bang up to date on the latest employment law and all new employees are hired or fired according to their skills and work product rather than unconscious bias or your fondness for blonde hair and long legs.

If a problem arises, seek legal representation immediately. A solicitor experienced in employment law will be able to determine whether the plaintiff has a genuine case or is after easy money. If the case does go to an employment tribunal, you will need a solicitor on your side, so don’t try and fight this alone.

(C) Blogtrepreneur via flickr.com

Immigration Law

All employees must verify that anyone they hire, even on a casual basis, has the right to work in the UK. If you inadvertently hire an employee who doesn’t have permission to live or work in the UK, you will be held liable. Therefore, you need to ask for identity documents from all new hires, whether they are British, EU nationals, or from outside the UK. If you are caught hiring illegal workers, the penalties are unlimited and you could end up with a five-year prison sentence.

Have systems in place to check all employees’ immigration status. Don’t rely on someone else to do the job. If a check falls through the cracks because someone is sick or distracted, you will be the one prosecuted. Be proactive and educate your HR team on the importance of proper immigration checks.

Disgruntled Customers

It is a universally acknowledged truth that you can’t please all the people, all the time. No matter how hard you try to provide excellent customer service, someone, somewhere will complain. Most dissatisfied customers can be appeased without too many problems, but if a customer sues you because of a faulty product or poor service, you need to take professional advice. In the meantime, do your best to prevent problems happening by honing your customer service.

Online Reputation

Be very careful how you conduct your business online. We often forget that everything we say online is permanently recorded, there for posterity, for better or worse. You are free to say what you want online, but if you say anything libellous about a competitor or client, be prepared to deal with a lawsuit.

This is not an exhaustive list of the legal issues you might face as a business owner, but it covers the main areas. The other key area you need to worry about is payroll, VAT, and taxation. If you don’t fulfill your obligations in this area, the government will take legal action against

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