One of the worst things that can happen to any small business is to receive a court summons. Lawsuits are expensive, time-consuming, and could kill your business. Many business owners find themselves sued due to a lack of knowledge on particular areas of the law. Others have to experience lawsuits that come about because of malice. We are here to give you 5 different types of law to be aware of and explain to you how you can avoid legal trouble as a small business owner.
DISCLAIMER: This article is more informational purposes only. It does not constitute legal advice in any way. If you have questions about a specific legal issue, consult a licensed attorney.
5 Types of Law You Should Be Familiar With as a Small Business Owner
1. Trademark Law
One of the first types of law you will have to think about is trademark law. This is because, the first thing you do when starting a new business, is choosing a name.
It often takes countless hours of brainstorming to come up with a great name for your business. Once you find the right one you may become so excited that you start using it immediately. But this can be problematic. Many times another company will already be using a logo, name or motto that is too much like yours. If that company has already registered that name/logo/motto, you could find yourself subject to a cease and desist letter, or even a lawsuit.
There are many ways you can avoid this. You can check if your potential name is available at your state’s secretary of state website. There you can search for registered corporations. After that, you should file a DBA (Doing Business As) form in your county or state. All businesses should do this (unless the business title is your full name).
Learn here more about how to trademark your business.
2. Employment Law
Are you thinking about expanding your company or hiring new employees? Consult an employment law professional about the types of laws on employment in your state. Usually, this would be a lawyer.
It is important that you are aware of laws governing the payroll and withholding taxes. Also, anti-discrimination laws, OSHA regulations, unemployment insurance, workers’ compensation, and more. If you end up breaking any of these laws and regulations you could find yourself the subject of a lawsuit.
3. Tax Law
It is no secret that tax season is one of the worst times of the year for many individuals. Things get even more complicated and difficult when you are trying to run a business. That is why it is important to be aware of tax laws and regulations. Filing your taxes with the IRS the wrong way could lead to some serious ramifications. If this is your first time filing taxes as a small business owner, learn here all you need to know.
The last two are not exactly types of law, but two legal procedures that are essential for your business.
4. Licenses and Permits
Every business owner should be aware of the licensing and permit requirements in their field. These include things such as general business operation licenses, a sales tax license and zoning, and land use permits. Depending on the field your business is in, you might also have to get health department permits or certain occupational permits.
Most states and localities have different types of required licenses and permits on their official website. Some quick research online will let you know what you need to get to run your business without getting shut down by local, state, or federal authorities.
5. Legal Entities
When you first begin to build your business, you will have to decide what type of legal entity your business will become. The most common types of business are sole proprietorships, partnerships, C corporations, Limited Liability Companies (LLCs), and S corporations. The legal entity you choose will affect the amount of taxes you pay and the amount you can be liable for the actions and consequences of your business. Here you’ll find a detailed definition of each type of business legal structure.
Hopefully, this gives you a general idea of the types of laws you should be aware of when starting up your business.
Keep reading: How to Get a Business Lawyer, Plus Free Options.