Starting and running a small business comes with many legal considerations that entrepreneurs need to be aware of. Having a basic understanding of business law, and seeking guidance from professionals like Sagi Shaked, a local injury lawyer in Miami, can help protect your company as it grows. Here are some of the key areas of business law that entrepreneurs and small business owners should have a grasp on.
Forming Your Business
One of the first legal steps when starting a business is choosing the right business structure for your company. 33.3 million businesses in the United States qualify as small businesses according to the U.S. Small Business Administration. The most common structures for these small businesses are sole proprietorship, partnership, corporation, and LLC. Each comes with different regulations, legal protections, tax implications, and paperwork requirements that you’ll need to understand before deciding on a business formation. Things like liability and management flexibility should factor into your decision.
Intellectual Property
As a business owner, you’ll want to protect your company’s IP like its name, logo, branded content, and any patented products or processes. Registering trademarks, copyrights, and patents establishes legal ownership of your IP and gives you recourse if another entity tries to use it without your permission.
Contracts
Contracts are legally binding agreements between two parties. As a small business owner, you’ll likely enter into many types of contracts for services, sales, employment, real estate, and more. Shaked Law Personal Injury Lawyers recommend reviewing all contracts thoroughly and understanding the terms before signing. Key elements like length, payments, responsibilities, and dispute resolution should align with your business needs and capabilities.
Employment Law
Business owners must comply with employment laws that protect workers from discrimination and unsafe working conditions. Relevant regulations cover areas like hiring, compensation, benefits, termination, workplace safety, family and medical leave, and more. Stay up to date on your legal obligations regarding issues like harassment, accommodations, wages, breaks, overtime, privacy, and appropriate insurance coverage. Although over 80% of small businesses operate without employees, these entities still employ a total of 61.6 million people.
Taxes
There are many federal, state, and local tax obligations that apply to businesses. You’ll need to register your business entity, obtain licenses and permits, and understand your tax liability. Ongoing tax requirements may include income tax, payroll tax, sales and use tax, property tax, excise tax, and self-employment tax. Keep detailed records and work with an accountant to ensure you comply with all applicable tax laws and filings.
Consumer Protection
Most businesses interact with consumers on some level. Federal and state consumer protection laws exist to ensure ethical business practices and safe products. Familiarize yourself with regulations around areas like transparency in pricing, returns and refunds, warranties, data privacy, and advertising truthfulness. Violating consumer laws through unfair or deceptive trade practices can lead to hefty fines or consumer lawsuits.
Insurance
There are various insurance policies that small business owners need for protection. Requirements vary by industry and location, but common needs include general liability, professional liability, property coverage, workers compensation, commercial auto, cyber liability, and business interruption. Work with an insurance agent to fully understand your risks so you can secure adequate, affordable policies.
Personal Injury Law
Despite best efforts to ensure safety, accidents and personal injuries can happen in the workplace. Understanding personal injury laws will help you respond appropriately if an employee or customer is ever injured on your business property or by your products. There are about 2.6 million nonfatal workplace accidents and injuries in the United States’ private industry each year, so it’s important to take precautions and follow regulations like OSHA.
Data Security
Businesses collect and store customer, employee, and proprietary data. Staying compliant with data security laws helps minimize your business’s vulnerability to cyber-attacks or data breaches. Relevant regulations include state data breach notification laws, Europe’s GDPR, industry-specific rules like HIPAA for health data, and the Federal Trade Commission Act for protecting consumer data.
Even basic legal knowledge goes a long way in protecting small businesses as they grow and scale. Prioritize understanding the laws that apply to your particular industry and business model. Consult legal counsel when needed to ensure your company avoids penalties, lawsuits, and undue risk as you become established. With the right legal precautions in place, you’ll have one less thing to worry about as you focus on running a successful business.
