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Small businesses have become increasingly popular. Many developing economies even encourage customers to engage more with the services that small businesses offer. If you intend to launch a small business soon, you must make certain legal considerations. Small business can include cafes, ice cream parlours, real estate agencies, personal training, life or career consulting or coaching agencies etc.
Businesses may face various legal hurdles until they are completely established and operational. It is quite possible to face legal issues including disputes with customers even after you have fully set-up your company. In this article, we explore some of the common legal issues that small businesses are susceptible to facing.
- Licensing, Permits & Compliance
Each local or state government has strict requirements in relation to the kinds of licences that small business should hold to carry out their business lawfully. It is the obligation of the small business owner to make sure that they have applied for or registered for appropriate licences.
For example, if you are a restaurant owner and you sell alcohol in the premises, you will need a liquor licence. Other food and beverage licences may also be applicable. On the other hand, if it is a construction-based businesses, you will need a construction licence. It is ideal to get in touch with lawyers as they can help you understand which all licences you may require.
2) Business Structure
Before launching the business, you have to determine and decide on a business structure. Are you intending to run a proprietary limited offshore company formation (pvt. ltd), or are you setting up a sole trader business? There are other types of business structures. Choose one that is apt for your particular business and ensure to comply with all associated rules and regulations of that business structure.
3) Employment Contracts
Naturally, for running a business successfully, you will require help and expertise. Employees form a crucial part of the business. When dealing with employees, you must comply with all legal requirements including setting out obligations in a written contract.
Employers and employees must enter into written contracts as it protects both parties from any unfair or illegal behaviour by the other. It is necessary to look into the legal aspects of a contract. Ideally, an employment lawyer can help you with drafting these contracts.
The employment contract typically includes information such as the responsibilities and duties of the employee and the remuneration they will receive for the services they offer to the company.
Moreover, it must include information about the number of paid leaves the employee is entitled to within a given year, as well as the obligations of the employee to inform the employer if they choose to leave the company.
4) Intellectual Property
Intellectual property includes patents, copyrights as well as trademarks. When setting up a new business, you must ensure that you are not breaching any other businesses’ intellectual property rights. For example, check that the name that you have decided to trade under is not already registered.
Secondly, look into trademark registration or copyrights for your business. This protects you from any copyright infringements in the future.
Author info:
John Bui is the Principal Solicitor of JB Solicitors – a law firm based in Sydney, Australia. John has extensive knowledge in the areas of family law and commercial litigation.
