Did you know that there are numerous legal issues your business can face? In fact, some of these are so serious that you could end up in prison if you do them wrong. The good news is that you can stay out of trouble pretty easily if you know what to do in these legal situations. Here are 8 common issues you might face:
Data Breaches
One of the most common IT risks, when you’re running a business, is a data breach. Building out computer systems and connecting information is great, but if you can’t protect that data from getting breached by hackers, you could end up in legal hot water. Data breaches can be very costly to your business. A data breach can lead to reputational damage, legal action, and hefty fines. More and more small and medium businesses are at risk of data breaches often because they don’t have good measures in place to prevent them.
Employees’ Compensation
Paying your employees fairly is essential if you want to stay out of legal trouble. If you offer one person a higher salary than someone with similar experience, it could become a discrimination suit if the others find out about it. Compensating employees equally for the work they do is very important. This means offering the same benefits to everyone who qualifies based on the standards you set in advance.
Sexual Harassment Claims
Sexual harassment is a form of discrimination that involves unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature. It’s illegal under federal law and the laws of most states. Sexual harassment can happen to anyone male or female so it’s important to apply your harassment policies equally no matter who is reporting an issue. If you don’t, you could get into problems down the line if you don’t deal with these matters in a professional and legal way.
Intellectual Property Issues
Intellectual property is a valuable asset for your business. Most companies have policies in place to protect intellectual property. Anyone working for the company who comes up with ideas usually agrees that the intellectual property they create now belongs to the business. However, in some cases, you can run into legal problems if someone tries to take intellectual property away from your company. Additionally, if you unfairly compensated someone for their ideas, you could also run into challenges.
Intellectual property includes trade secrets, which is confidential information that gives your company an advantage over competitors. It’s also graphic designs and software programs that are used to operate your business. Make sure you have clear intellectual property agreements up front before people start working for you.
Employment or Freelancer Contracts
Employment contracts are an agreement between two people or two entities. An employee contract will lay out the basic details of your working relationship with an individual or company. It should include some basic details like the name of both parties to the agreement, as well as their contact information, the work that is being agreed upon, timelines, and compensation. Working with a lawyer to create these agreements can protect both you and the people who work for you.
Buy-Sell Agreements for Startups
It’s important to have a buy-sell agreement in place if your startup has a co-founder. That way, when someone leaves the company or passes away, it’s clear who will take ownership of the part of the company at that time. It protects the business and the assigned assets of the person who leaves the company for any reason. It’s important to work with legal experts to create this agreement so that everyone knows how much each share of the business costs and what will happen to those shares if one person leaves.
Business Taxes
If you own a business, taxes are an important part of the equation. You need to stay on top of tax laws and make sure you’re in compliance with them at all times. It’s also essential that you maintain good records throughout the year. It’s much easier to prepare your taxes when everything is organized, so keep track of receipts and other important documents throughout the year.
Conclusion
As you can see, there are many different legal issues that your business could face. Whether it’s protecting you from data breaches, litigation around harassment or discrimination, or having the right contracts in place, having a legal plan for all of these scenarios is essential.
