5 Basic Legal Principles You Must Know as an SMB

Photo by Sora Shimazaki:

Even as a small business, there are many areas of the law you need to know.

There are some basic legal principles that govern all companies across the world, no matter your overall size.

Fortunately, they aren’t too complex, and here is a quick overview of some of the most vital.

1. Understanding Contract Law

Contracts are useful in business because they help with agreements, ensure everyone gets what they bargain for and establish trust between two or more parties. However, there are some issues with traditional contact methods, such as delays, fraud, and chain of custody.

Fortunately, NDA management software for asset managers and other contract apps like e-Signing take care of the complexities of contracts. They also offer a competitive advantage over the physical.

2. Learn About Intellectual Property

When you create something, it is known as intellectual property. This could be a product, a work of art, or even a slogan that can be trademarked with other elements. Yet IP theft is shockingly common these days.

Counterfeit goods are a good example. For instance, manufacturers in China can place your logo on copied designs of your products. They can then sell these as genuine. You must also do your due diligence when coming up with designs of your own.

3. Basic Legal Principles Include Employment Rights

Finding good employees is one of the hardest things in modern business. And there are further challenges when it comes to keeping them safe and well. Just as you have employees sign for contractual obligations, there are obligations on your part.

For example, you can face workplace lawsuits for bullying and harassment. And then there are laws around working hours and even insurance policies you must legally hold for your employees, such as worker’s compensation.

4. Corporate Law and Governance

You can maintain the legal interest of your company with effective governance methods. This help ensures you meet required compliance and regulations within your sector in relation to corporate laws.

One common method of staying on top of compliance is through actively measured KPIs for business operations. Yet corporate law extends to how your business is formed, measured, and operates in accordance with local, national, and international laws.

5. Tax Regulations, Of Course

As a business owner, you will know all too well that you must pay taxes. No one likes to do this, but it is a legal requirement in every country. And the laws around taxes can vary slightly from place to place.

So, it helps to learn these as much as possible, especially if you operate in multiple countries. The penalties for tax mistakes, and indeed, avoidance, are harsh. You will be fined heavily, and in some instances, you can find yourself facing a hefty prison sentence.

Summary

You don’t need to be a legal eagle for business. But there are some basic legal principles that will help you.

For a business, even a small one, you must learn about contract laws, employment responsibilities, and tax regulations for each country your business operates in.

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