Avoid These Disastrous Legal Goofs!
You’ve got a lot of things to worry about when you start up a new business. You’re probably spending an awful lot of time worrying about your profit margins. And that’s not exactly a bad thing to be concerned about! Dealing with overhead costs, the price of manufacturing and delivery, the design of your website, the technical aspects… there are so many immediate and obvious concerns that you may risk spending so much time on them that you neglect to take care of some very important matters that aren’t quite so obvious!
As you’ve probably guessed from the title, we’re going to be looking at the legal complications that can occur if you don’t pay attention to the law when you’re setting up a business. You may be surprised to find out just how many small businesses are often crippled or even end up collapsing completely due to legal snafus that could easily have been avoided with the proper legal insight during the development process of the business.
Here are three extremely dangerous but alarmingly common mistakes new businesses tend to make in this field!
Going in without insurance
So many people equate insurance with unnecessary expense, almost like warranties on new tech products. But in the world of business nothing could be further from the truth. Just as you shouldn’t underestimate the importance of something like life insurance in your personal life, so you shouldn’t underestimate the importance of liability insurance in business. Without it, a wronged customer or other party may find a reason to sue you for liability, something you could have been protected against. Read up on the different kinds of liability insurance.
Letting other businesses steal your property
I’m not talking about the risk that, say, Apple are going to break into your office and steal your computers. I’m talking about companies stealing your intellectual property - something they may be legally free to do if you haven’t got the right legal protective measures in place. I’m talking, of course, about trademarks. Don’t assume that no-one would have the gall to steal logos, slogans, designs, or even your company name even when they’re not tied down by intellectual property laws. Make sure you know how to trademark your business assets before you start introducing them to the public (or even potential investors and business partners!)
Neglecting development of clear contracts and terms
If your business sells goods, either to other businesses or to public consumers, then you’re probably going to need a standard form contract. You’re also going to need to ensure that the terms of your service are outlined clearly somewhere on your website. You shouldn’t be engaging in any sales before these terms are precisely what you need them to be. Whenever an official business sale is made, some kind of contract is being agreed upon. The conditions of these deals need to be made absolutely explicit. Otherwise, one of the parties will have a lot more leeway to interpret the contract however they want than the other party would want! And this can result in expensive reimbursements, lawsuits, or settlements.
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