7 Legal Issues Business Owners Might Face 

 April 15, 2022

Current business operations are fast-paced and sometimes overwhelming, resulting in legal disputes. It is essential to prepare proper documentation to steer off the regular legal chaos. When appropriate, look for guidance or talk to employment lawyers to evade lawsuits that can put your business at risk.

Read On To Understand Some Legal Issues Faced By Business Owners:

1. Employee Termination

Terminating an underperforming employee can result in legal problems if the business owner does not handle the situation properly. The employee can sue the employer on allegations of wrongful termination lawsuit.

You can prevent the probability of legal repercussions by following the preferable precautions before any job termination. For instance, stating the employment terms and regulations in an employee handbook and pointing out disciplinary actions involving the worker.

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Related Resource: 4 Tips For Non-Technical Savvy Business Owners

2. Licensing



The cost of obtaining a business license depends on your residence, but its necessity is constant in most countries. Most business owners encounter licensing legal disputes.

It is advisable to ensure that you adhere to your local government’s laws and regulations regarding licensing. This will help you steer clear of charges and penalties that you can avoid.

3. Health and Safety

Employers should ensure that workers adhere to health and safety guidelines and rules in the workplace, especially if the job involves special devices and manual work. Work environment injuries are regular, and if they happen, the parties involved can decide to sue the firm for damages.

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Business owners need to have a health and safety policy to document the organization’s procedures and responsibilities to be followed to prevent illnesses and injuries. Additionally, they should work towards minimizing workplace challenges and issues.

4. Employee Classification

Create legally binding contracts with novel employees that define their work status, if they are part-time, full-time or independent contractors.

The classification impacts employment contract terms that state provisions on various work aspects such as minimum wage benefits, and paid overtime.

Employment entitlements vary across countries. For instance, in the United Kingdom, full-time employees should work for at least 35 hours per week.

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5. Shareholders’ Agreement

Shareholders' Agreement

Shareholders' Agreement

An agreement is a necessity if your venture has two or more shareholders. The shareholders should draft and document the agreement, make matters more professional and legal, and invite a business-oriented lawyer to oversee.

If the company gets split up or sold in the future, if there is no existence of an agreement, legal issues might arise. When it comes to business, avoid leaving any grey areas and be clear about who will get which share if things do not work out.

6. Trademarks

Trademarks are one of the most common legal challenges multiple business owners encounter. It is highly likely that you can come up with a name that already has a trademark, and it may lead to infringement which can cost the business a lot if the issue is pursued legally.

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It is recommended to carry out adequate research before naming or renaming your company or debuting new services or products.

7. Discrimination

Current or former employees can sue your company, citing discrimination related to various factors such as hiring, working in a hostile environment, or firing. The discrimination allegations mostly are based on ethnicity, gender, and age.

The employer’s responsibility is to establish a healthy work environment and culture that promotes diversity. Ensure your organization provides equal employment opportunities to all prospective by creating an equal Opportunities and Anti-harassment Policy.

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7 Legal Issues Business Owners Might Face was last modified: April 25th, 2022 by Arnab Dey

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