Legal Aspects to Consider When Starting a New Business

Many factors contribute to the success of a business. Some have a great product or service, while others offer innovative ideas. In other cases, the company found perfect timing to address a pressing need.

For all these things to happen, the business must start the right way. It must consider all legal aspects of building a company, including proper hiring of employees, applying for permits, licenses, and trademarks, and implementing clear internal policies.

Hiring Employees

People makes a company. Whether you’re a small entrepreneur just starting to hire talents, or the president of a multi-national corporation wanting to expand your reach, you want a good pool of talent to boost your profit and gain a solid customer base.

As obvious as this might sound, many new companies fail to recognize the importance of establishing clear employee hiring guidelines. As a result, they end up having to deal with employee-employer disputes, breach of employment laws, and other issues that could have easily been avoided.

To prevent this from happening and make the process of starting a business as smooth as possible, all new business owners should ask themselves a series of questions. They include:

What kind of employees am I planning to hire? Do I need a full-time workforce? Or can I rely on part-time staff, freelancers, independent contractors, temporary workers, or a combination of several of them?

Have I drafted employment contracts for each type?

Have I done my due diligence concerning local and national laws on the hiring of employees? This includes not only the contract itself but other aspects like health insurance, social security packages, and retirement benefits.

Are there any specifics to my business that need more detailed contracts? For example, your business can be a factory where accidents could happen, or you might work in advanced IT where classified information is vital.

Does my company have a diverse workforce that adheres to fair employment practices? It means hiring people regardless of their gender, race, religious beliefs, etc.

Some of these questions you will be able to answer yourself. Still, it’s best to hire an employment attorney to guide you through any difficulties you might encounter along the way.

signing a contract

Licensing and Trademarks

If you are in the produce business and your company sells a wide variety of fruits, please don’t name it Apple. The same goes for an eye-wear boutique called Goggle. In the first case, your company name is already taken. Also, it is misleading to both existing and potential customers.

Sure, you might get a lot of traffic if you’re planning to set up a website. But it’s not worth the future legal headache you will face.

The same goes for the latter. Even though the name is not the same, it’s too similar to the search engine giant and, thus, could be ambiguous. I’m sure you can come up with something better.

Licensing and trademarks not only pertain to the name of your business. They also include local and federal permits depending on what kind of venture you are into.

In terms of permits, you might need several of them. Examples are tax permits, air pollution permits, health department permits, fire department permits, and many others. As for trademarks, if your company has a novel product or service you think it’s worth protecting, be sure to inquire at the United States Patent and Trademark Offices for procedures and clarification.

Finally, do your research on intellectual property agreements and how they are specific to your industry.

Handbooks, Manuals, and Internal Law

The most important aspect startups should consider is internal law or company rules. How many extra days off can an employee take if he has been working overtime for the past two months? Can they carry over to the following year, or does he get financial reimbursement for the days he missed?

If a worker shares confidential information by mistake, which costs the enterprise a lot of money, how should management deal with this?

These and other questions will arise almost daily. Hence, it is critical to establish clear company guidelines by creating handbooks and manuals that all staff has access to.

Of course, not everything can be accounted for. Yet, a comprehensive set of internal rules will prevent mistakes from happening and deal with them properly if they do.

Employee hiring procedures, licensing and trademarks, and thorough, well-plotted company policies are essential legal aspects for any new business. By exploring them carefully, your organization will be on a good track right from the beginning.

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