Common Legal Issues Businesses Face

The business world is filled with potential legal obstacles. Businesses of all sizes are vulnerable to a number of issues that can be at best a distraction, and at worst, threaten the business.

As your business grows and becomes more complex, these are the legal issues you need to watch out for.

Employee lawsuits

If an employee is injured at work, they will more than likely retain a personal injury lawyer if they believe there has been any negligence by the company. In order to protect yourself from these types of legal issues, ensure that you have robust health and safety policy and that employees are well trained, this will keep injuries to a minimum.

Intellectual property disputes

IP can cover a range of areas, from the name of your business to your products. You need to take steps to protect your business from IP infringement from other companies. If you fail to trademark your business elements, other companies can use them without fear of legal challenge.

It works the other way too. When branding your business and designing products, ensure that you do your research so that you aren’t infringing any other company’s IP.

IP disputes are notoriously difficult to resolve, taking a lot of time and money to settle.
Contract disputes

Poorly written contracts between clients, suppliers or other businesses are a major source of legal dispute.

In order to avoid costly contract disputes, make sure that your contracts are drafted and reviewed by a legal team before they are signed. Shareholder disagreements

Unless you’re a sole trader, there is always the potential for disagreement between shareholders. Disagreements can be over issues small and large, which affect the ethos and direction of the business. While some friction between shareholders is inevitable, there are ways to try and minimize the risk. At the outset, try and draw up a robust shareholder agreement, this sets out what happens in certain situations and what happens if one party wants to leave. Frequent communication and business planning can also unearth any issues at an early stage before they become real problems.

Cybersecurity breaches

Unfortunately, small businesses are targeted by cybercriminals on a regular basis. A breach can cause financial and legal implications for a business. While it’s not impossible to stop every cyber attack, having a cybersecurity plan in place with the relevant backups and insurances is one way to mitigate the damage.

Employee contract breaches

There is a risk that departing employees can take sensitive data with them when they go in order to use it in their next job, or pass it along to their new employer. When hiring, ensure that there are ironclad restrictive covenants in place so that if they are breached, you have legal recourse.

Conclusion

The longer you are in business, the more likely you are to encounter legal problems. Many of these situations can be avoided by performing proper due diligence and planning. However, some in some cases it will be unavoidable and you will need to seek out professional legal advice.

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