One of the biggest risks you can take on in life is trying to run a business of your own. Many people all over the world do it, and it is nothing out of the ordinary. But, it does carry a lot of risks with it. Some of the biggest you’ll encounter if you decide to form a company of your own the legal risks. Being in line with the law when you operate a business is quite important. The best way to ensure this is to be aware of it from the start.
So, considering that you are reading this article, you are about to start a business, right? You’ve come to the right place to get a little knowledge of the legal matters that could come your way and how to address them in the best way possible. The ideal scenario would be to have legal help from the start. If you’re living on the Iberian Peninsula maybe this Business Law Firm in Spain can be of help in starting your business. If not, you can rely on our five legal risks when starting a new business & tips for managing them.
We are sure you’ll find our article useful as we try to cover the legalities that follow forming of a new company on s small scale. If you have a better idea, or you’ve noticed that we’ve missed something you’re free to fill us in on your ideas in the comment section. Suggestions are always welcomed when you deal with businesses, money, and legal matters. But, before you know where we went wrong, you need to read this article first and see if that’s even the case. Let’s start.
1. Business Structure
It all starts with the structure. You need to know the legal structure of your new business in addition to its location. When a company is new it all starts here. You need to be clear on these issues as they influence the matters that come later on. We are talking about things such as tax requirements, funding, and various forms of liabilities.
2. Intellectual Properties
This is quite important. It is no longer vital who came up with the idea first, but who was the first to register. You need to take care of all aspects of your enterprise. We are talking about name, logo, trademark, and of course, your product or service if it’s unique.
If you do not provide proper legal protection for all things tied to your business you could find yourself on the wrong side of legal proceedings. Intellectual property is vital these days and you, without a doubt, need legal help to protect it.
3. Licenses
Starting a business might seem like a straightforward endeavor. But, it’s not. It has many obstacles and hiccups until you get things up and running. To open a fully legal business you’ll need a set of licenses depending on the state where you’re starting your firm.
While the number of licenses may vary from the state and the type of operation you will carry out the three you’ll need without a doubt are sales tax permits, business licenses, and trading licenses.
4. Employee Contracts
There’s no such thing as a one-man business. The profile no longer exists. If you want to run even the smallest of firms you’ll need employees. With employees there come legal obligations and legal risks. This is where you need to take good care of both protecting yourself and your employees.
The first step when hiring an employee is to hand them a contract. Creating a contract is not an easy feat, as it needs to suit well both parties involved. This is where you need to lower the risks of something going wrong by having professional contracts made by a legal firm or an attorney.
5. Insurance
We all hope that things will go well for us. But, misfortunes happen, and things do go south sometimes. This is why having insurance is an important part of running any business. In many countries having insurance is needed by law. But, even if it is not you need to have it.
Both for your business and your employees. Also, every aspect of your work needs to be insured. We’re talking about products, services, and the tools you might be using. When inured the risk is slimmer that something will go down, and even if it goes, you have a safety cushion to land on.
How to Mitigate These Risks
First of all, you already have a clear idea of how. The first step is to identify the risk. This is what we have already done in the five paragraphs above. There are plenty more risks that you’ll face as a new company, but these five probably top most of the lists. Once you know the risks, it is much easier to handle them. After the identification is done you need to perform a risk analysis. This is not an easy task, but one every new business owner needs to learn how to do.
While you’re running this analysis you need not only to look at the risks you, your product, or your employees might encounter but also at the legal side of the same matter. To every real risk, there are legal consequences and risks too. You need to have them all in mind to provide a proper response. All of this tied well to risk management. You need to have it prepared and ready to deploy at any given moment. Risks are not a solitary occurrence.
They are living organism which is always present. Thus you need to be always prepared. The best way to be and remain prepared is to make everyone involved with your company aware of the existing risks both real and legal. This is achieved by keeping the communications channels open at all times. When you see the legal risks involved with a start-up, it is evident that you need to approach them from the start, and with everyone involved on the same page. It’s the only path to success.
