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Tips to Avoid Legal Issues When Running Your Business

Having to hire legal services is a top reason, so many small business owners wait to hire someone until it is just about too late. While hiring a lawyer may not be a possibility for advice and guidance, there are other steps you can take as a small business owner to prevent lengthy and expensive legal disputes. During the earliest days of your business, you may find it challenging to set aside part of your already limited budget to hire attorneys. However, if you want to avoid having to use the services of Las Vegas criminal defense attorneys in the future, at the very least, you need to know what your legal requirements are. Keep reading for some top tips on how to keep your business out of legal trouble.

Take Time to Define Your Business Structure

Defining your business structure is the foundation of all the policies and work you will do and the business you will ultimately build. It will also impact your taxes and how much personal liability you have if a lawsuit is filed. As a result, you must register your business as one of the following entities. A sole proprietorship is a company that one person owns. There is no need for a legal entity here, as you remain in control of everything, which means you are also responsible for all related taxes and liabilities. A partnership is a company established between two or more people. These individuals share the profits and are equally responsible for any liabilities. It is best to create a partnership agreement that outlines all the details of the business. This can help you avoid disputes down the road.

You can form a C Corporation, a company that is viewed as an independent legal entity. This means the business is separate from the owners. Another option is the S Corporation, which has more appealing tax benefits than the C Corporation. The last option is an LLC or Limited Liability Company.

Employee Classification 

When you are ready to hire employees, you should create a legally binding contract. In this contract, you need to define their status clearly. For example, are they being hired as an independent contractor, part-time, or full-time worker? This will impact the terms included in your employment contract, which is used to outline various factors of their job, such as entitlements, benefits, pay, and more. The difference between your full- and part-time workers is the number of hours they work. While this varies from one state to the next, most agree that full-time workers are scheduled for 35 to 40 hours per week. Also, if you pay your workers by the hour, they may not get the same benefits that someone on salary would. All this should be outlined and explained in the employment contract you use.


You may also have independent contractors. These are individuals who run their own business or who hire out services to another organization. Usually, an independent contractor will negotiate specific fees and different working arrangements. They may also be able to provide services to more than one client at the same time. An independent contractor is not entitled to any type of benefits, and they must pay their own taxes.

Employment Termination 

When it is time to terminate an underperforming employee, there are some situations where legal issues may arise if you do not handle the situation properly. It could cause the employee to file a wrongful termination lawsuit or an administrative hearing. Some of the valid reasons that you may terminate an employee include retrenchment, misconduct, or underperformance. If you are going to do this, you should create a Notice of Termination and provide a notice period based on the amount of time the person has been working at your company. You can only dismiss a person instantly if they have engaged in assault, theft, or fraud. If you want to avoid your employee's unlawful termination, you need to make sure that you have clearly outlined all expectations. These are things that also need to be included in your Employment Agreement.

Discrimination Considerations

Prospective, current, and former employees may sue if they believe they were discriminated against during the hiring or firing process or believe they were working in a hostile environment. It is important to note, allegations of discrimination may be based on age, ethnicity, or gender. It is your job, as the employer, to create and promote a healthy and safe environment and work culture that encourages a sense of diversity. It is important to note that two main types of discrimination may exist. This includes direct discrimination, which occurs when someone is not treated fairly due to their marital status, family responsibilities, age, disabilities, race, pregnancy, color, immigrant status, national origin, or descent. The other type is indirect discrimination. This occurs when a certain practice applies to all workers, but there is a lack of fairness with one of the groups of employees mentioned above.

Information Sharing 

When speaking with potential employees, contractors, or business partners, you may be sharing confidential information about the way you conduct your business. Requiring them to sign some type of confidentiality agreement, such as an NDA (non-disclosure agreement), will help you protect your business secrets. This is a legally-binding contract that helps ensure everyone who signs it will keep some information private.

After you decide to hire an independent contractor or employee, you can include a confidentiality clause in your Consultancy Agreement or Employment Contract. This will ensure that private information remains private and give you a source of legal action if it does not.

Electronic Device Use

If you have any employees (even just one) who use their personal devices while at work, then you need to create a BYOD device policy. This will ensure your network security. Even though these policies are common today, especially after COVID forced millions of workers to remain home, it is essential to outline a few guides and regulations in the modern world. Keep in mind, offering BYOD at your business provides many benefits. For example, you will see increased productivity among your workers. Also, you do not have to invest as much of your business funds into technology and equipment. However, you have to take steps to ensure everything is secure, or you may put your network at risk.

Employee Safety and Health

If you are employing someone for a job that involves any type of physical work or the use of heavy or special equipment, you have to ensure their work environment follows all safety and health guidelines and rules. Workplace injuries are extremely common. If they occur, the employee who was injured may decide to sue. You should make sure you have a health and safety policy created that states the employer's responsibilities and an employee's responsibilities.

Protecting Your Business 


As you can see from the information here, you should take a few steps to protect your business from potential legal issues. Using the tips here, you can create a successful business and minimize the legal problems you must deal with. Being informed, knowing how to protect your business, and taking the right steps will pay off in the long run and help ensure your business thrives.


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