When you have a small business, chances are you would be looking after most of its affairs. While you may be performing all the roles efficiently and effectively, such as overlooking the marketing of your products or the budgeting of your next month’s expenditure, the legal aspect of running a business is one which requires professional insight.
Although with proper guidance and careful attention you can avoid the legal pitfalls pertaining to running a small business, there are three legal areas which we believe are of paramount importance. Also, legal requirements keep changing, so you need to pay attention to the changing legal dynamics in your country.
Does Your Business Need a Particular License?
If you are running an alcohol or a tobacco business, then one of the first steps you took was probably securing a license. Even in other industries which don’t have as much regulations, there is certain amount of documentation required at the beginning before operations can commence.
However, not all licenses are obviously required, and you need to make an assessment about whether all your licensing needs have been fulfilled before you run into trouble with the authorities.
One major licensing requirement often ignored by small businesses pertains to licensing of software. In many countries, software is available without license to be installed and used by everyone even though it is considered illegal. For many, it is not very obvious that they are breaking the law.
At the personal level, using unlicensed software may not result in any serious repercussions. However, for a company, it can mean a heavy fine and also leaves your business vulnerable to cyber-attacks.
Have You Subscribed to the Required Insurance?
Every business has a unique set of needs when it comes to insurance. For example, for a business working in the oil marketing sector, insurance would not only need to cover workplace-related injuries pertaining to all employees, especially those working at the fuel sites, but also would need to cover the fuel that is transported to each individual retail location as the fuel is susceptible to damages, causing huge losses.
One insurance category which you must consider getting for your business is the employer’s liability insurance. This is to protect your business against any compensation claims which may be raised against it, such as those which may be raised by your own employees in case they suffer an injury or fall sick while at work. Claims can also be raised by third parties if and when someone representing your company even remotely causes harm to them.
Although under certain categories your business may be mandated to subscribe to this insurance, if your business operates in such an environment which makes it prone to damages, then it is a good idea to get an insurance to provide adequate cover against any possible claims as they can amount to thousands of dollars.
Are You Aware Of All The Property Laws?
When thinking about property, you must’ve read up on all the laws pertaining to the land and the building where your company operates. You may have also studied and adhered to all the laws regarding the physical assets your business owns. But have you paid heed to the laws which govern intellectual property?
Many small businesses make the mistake on missing out on securing their intellectual property. This includes everything you have worked on in creating a distinct identity for your brand or product/service offering. Even the trademark you have for your business is considered part of intellectual property, as you come up with it.
Infringement of intellectual property is a serious offence and can lead you in hot waters or otherwise seriously damage your business. If you commit such an infringement, then you are susceptible to being sued and pursued for heavy fines by the party who owns the intellectual property.
Similarly, if you are unaware of your intellectual property ownership and rights, then you won’t be able to pursue a case of intellectual property infringement either because you won’t be able to identify it or because you won’t understand how to challenge it.
A simple subscription to indemnity insurance will help in covering for this type of insurance, although it is advisable you hire the services of a professional lawyer if you decide to proceed and file a lawsuit.