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Sunday, November 04, 2007

Laws Tips For Small Business

By: William Samuel

Small businesses need to take precautions and be prepared for anything, including the potential of lawsuits or the need for legal counsel. There are two main ways to equip your business with the legal protection you need. One of those ways is to be self-taught. By reading books on business law, and keeping up-to-date with small business legal issues, you can feel “in the loop” if something occurs.
The second way to protect yourself legally, is to retain legal counsel services. Selecting a reputable law firm to represent you and to answer your legal questions is an important step for the small business owner. Let’s take a look at some important ways to identify the right law firm for you.

Selecting legal counsel
It goes without saying that when selecting legal counsel, you want to make sure the attorneys on staff for the law firm have studied and completed their degrees from accredited law schools. From there, they become licensed to practice law. A good legal counsel should not only be well-educated, but also knowledgeable in business law and specific areas that affect your particular type of business. Law students and lawyers, as smart and educated as they are, do not know everything there is to know about all aspects of law. This is why it’s important to select a lawyer with specific skills, knowledge, and experience in areas affecting small business practices. With adequate research, a good legal counsel can help you analyze and interpret legal documents and forms.

When to consult legal counsel
Before signing any contract, it’s important for the small business owner to understand exactly what sort of contractual agreement he is entering. Contracts sometimes include small print agreements that if not understood correctly can come back to haunt you when you least expect it.
If someone has threatened or filed a lawsuit against you, you definitely need to consult a lawyer about it. Lawsuits can be a real pain for small businesses. A lawyer can help you understand your rights, as well as help you put together a game plan for dealing with lawsuit, and everyone involved.
Sometimes people wait until the very last minute to seek legal help. This can be a very big mistake and one that can be more costly in the long run. The more options you have up front, the easier it is for the lawyer to help you make the right choices. They can provide the much needed guidance and direction you need, without guesswork. The longer you wait to seek help for a legal issue, the more likely that issue will compound and leave you fewer options.
It doesn’t cost a thing to consult a lawyer to determine just what sort of help you might need. In fact most lawyers provide free consultation the first time around, and then can be retained for a fee for future consultation and legal counsel.
A small business would do well to hire an attorney during the early stages of starting his or her business. It’s a good idea to consult with an attorney prior to purchasing or leasing a building; starting or buying a business; and if there are personal, property or employee accidents on the job. It’s also good to have a plan in place for sexual harassment training in the workplace. If such an incident occurs among your employees, an attorney will be needed. Other issues that might come up include problems with taxes, or trying to collect on unpaid bills.

Relationships with investors
One of the worst things that can happen to a company is to have a minority shareholder who is unhappy with how the company is being run and have no way to force him to sell his shares back to the company at a fair price. This situation can foster a devastating lawsuit by an unhappy investor. A shareholder agreement or a partner buy-out agreement can avoid this problem and give the company the right to buy-out an investor. Without an investor buy-out agreement, there is virtually no way to eliminate an unhappy investor at a fair price.

Common Law Copyright
When you create an artistic work such as a book or music, you automatically are granted copyright. If some infringes on your copyright, however, you must have registered it with the Copyright Office to get damages.

Raising money
Observe the securities laws scrupulously when raising money. Failure to do so will invariably result in an investor obtaining the upper hand if and when the investor sues the company. The only way to have a good understanding of securities laws that apply to money-raising efforts is to consult a legal advisor prior to soliciting money from everyone -- including friends and relatives.

Trade names
One of the worst shocks a small business can receive is a lawsuit or the threat of a suit alleging that the company should stop using its name. Do your homework to ensure that you have the right to use the name of your business. Simply filing a fictitious name statement or incorporating the business does not give you the unquestioned right to use a name. A trademark
search is the only way to be sure a particular name is available. These searches and the legal review associated with them generally cost less than $1,000.
After the search, consult your legal advisor to determine whether or not you should attempt to register the name with the U.S. Patent and Trademark Office. Loss of name identification and costs associated with it can ruin a small business.

Employee relations
Without a doubt, employee-related litigation is the most prevalent type of litigation faced by small businesses. Every small business should have a definitive employee handbook that contains all essential employee issues, such as the employer's right to terminate employees, maternity-leave rights, confidentiality, sick leave, vacation, sexual harassment, etc. The owner and each manager should be intimately familiar with the rights of employees in these areas.
Even when a business has only a few employees, management must understand all employee rights. If you comply with the handbook and the rules regarding employees' rights, employees should be discouraged from suing you, or you should have the upper hand if they do. Consult your legal adviser before terminating any employees.

At the end of the day, your specific situation is key to the legal issues confronting you. The best way to run your business is to have a handy lawyer a phone call away in case you need advice. Do it right the first time and you don’t have to worry about lawsuits. Hope this will help you in your business career.

Article Source: http://www.articlesnatch.com

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