How To Protect Your Business From Legal Problems

All businesses are likely to deal with legal issues at some point. A lot of business owners think that it’s not something that they have to worry about because they’re doing everything above board and they aren’t intentionally committing crimes, but it’s not just fraudsters that end up dealing with legal problems. Business law is incredibly complex and regardless of how your business operates, it’s likely that you’ll run into some legal hurdles at some point.

It might not be possible to avoid it entirely, but there are things that you can do to protect yourself in these situations and reduce the chances of finding yourself in a tricky situation. These are some of the best ways to protect your new business from legal problems and lawsuits.

Consider Who You Work With

If you’re partnering with other companies and working with suppliers and manufacturers, everything that they do reflects back on your business. Even if you aren’t doing anything questionable, you could still get caught up in a legal battle if you’re dealing with companies and individuals that are. That’s why you need to be incredibly careful about who you’re working with and make sure that you do your research first. Before you agree to enter into a contract with any company or organization, make sure you look into them properly so you know exactly who they are and how they do business. Even if they seem legitimate on the face of it, you could get caught up in some illegal activity if you don’t take the time to properly vet them before you agree to work with them. If you are dealing with multiple contracts, it would be best to have contract management software that will store your contracts digitally.

Be Careful What You Say And Write

Libel and slander are very serious legal issues and a lot of the time, people end up fighting court battles because of a few misplaced words. Whenever you’re speaking in public, your words are under scrutiny and if you say something that could be taken the wrong way, there’s a chance that it could lead to legal troubles for you. That’s why it’s so important that you choose your words carefully whenever you’re speaking on a public platform so you aren’t accused of libel or slander.

It’s also important that you’re careful what you say to employees around the office. If you make a joke or a comment that is taken the wrong way and it upsets or offends somebody, you could find yourself in trouble even though your intentions were never bad. It’s best to remain professional at all times when speaking with employees and remember that the things that you say might not be taken as intended.

Deal With Employee Disagreements Publicly

Sometimes, you will have a disagreement with an employee, it’s just a normal part of being a boss. But if you don’t handle these disagreements properly, it could lead to a lot of legal trouble for you so you have to be very careful. When you’re trying to deal with an employee disagreement, it’s important that you do it through the proper channels, out in the open. You might think that it’s best not to involve anybody else and to try to deal with it in private, but the employee in question could make all sorts of claims against you that you have no way of disproving.

The best thing to do is to go to the HR department and explain the situation to them. Then you can sit down with your employee, with some witnesses present, and talk through the issue. If you can come to a resolution through the proper channels and everything is above board, you shouldn’t have any legal issues. The problems will start when you try to deal with it on your own without informing the right people.

Always Use Contracts

Contracts are your best legal protection so it’s important that you’re always using them and using them properly. Whenever you enter into a partnership or agreement with any other company, you need a detailed contract that outlines all of the terms of your agreement. That way, you’re protected in the future if there are any legal disputes. It’s also important that you keep on top of old contracts and update them when needed. You should use contract management software to keep track of your contracts and make sure that they are still applicable. If your dealing with a supplier or manufacturer change, for example, your contract may be invalidated and it won’t offer you any legal protection in the future. Always ensure that you’re updating contracts accordingly as circumstances change. Contract management software helps a great deal in this situation.

There are a lot of small details that could invalidate a contract, like a change of business name for example. If the name of one of the parties changes, the whole contract could be disputed and it could be claimed that the company in question does not have to adhere to the terms agreed because the name is not the same. The definition of terms is something that is often disputed as well so make sure that everything is clearly defined and those definitions are agreed upon at the time of signing.

Hire A Good Lawyer

Some business owners think that they can wait until they have a legal issue before they hire a lawyer but that’s never a good idea. A decent lawyer doesn’t just help you get out of a tricky legal situation, they help you to avoid it in the first place. There are a lot of legal hurdles that you need to jump through when you’re first setting up the business anyway like dealing with copyright and patent laws or handling employment laws when you start hiring people. If you hire a good business lawyer from the outset, they can advise you on these things and make sure that you’re not making any simple mistakes that are likely to land you in legal trouble in the future. They’ll also be able to advise you on what to do if you do find yourself in a difficult legal position so you don’t make the situation worse, especially in the event of a lawsuit or investigation.


These are all important ways to protect your small business from legal trouble which could potentially damage it beyond repair. Follow the letter of the law, do everything by the book, and plan for potential legal threats!

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