8 Tips for Preventing Commercial Law Disputes in Small Businesses

Starting and running a business is an enormous responsibility. There are a lot of crucial aspects, and anything can happen at any time. That’s why it’s important to have a solid understanding of commercial law.

Commercial law is the body of law that governs businesses and commerce. It includes everything from contracts and intellectual property to bankruptcy and commercial disputes.

As a small business owner, knowing the ins and outs of commercial law will help you be prepared for anything. Here are a few tips to get you started:

1. Get everything in writing

Putting things in writing helps to avoid misunderstandings later on. It also provides a reference point if there’s ever a disagreement about what was agreed to. A commercial firm such as EM Law can help you draw up contracts, leases, and other documents.

Before you sign any contract, make sure you understand all the terms. This includes understanding what you’re responsible for and what the other party is responsible for. You should also know how to terminate a contract if necessary.

2. Choose the right business entity

The legal structure of your business impacts everything from taxes to liability. That’s why it’s important to choose the right business entity for your needs. The most common types of business entities are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations.

Each type of entity has its own advantages and disadvantages. For instance, a sole proprietorship may be the simplest and cheapest way to structure your business, but it also subjects you to unlimited liability. That means you’re personally responsible for all debts and liabilities incurred by the business.

3. Know the ins and outs of employment law

Employment law is complex, and there are a lot of rules and regulations to follow. There are laws governing everything from hiring and firing to wages and hours. As an employer, it’s your responsibility to make sure you’re in compliance with all the applicable laws.

If you have employees, you should have an employment contract in place. This contract should outline the terms of the employment relationship, including things like job duties, compensation, and benefits. It’s also a good idea to have a written policy manual that outlines your company’s policies and procedures.

4. Protect your intellectual property

If you have a unique product or service, you need to protect your intellectual property. This includes trademarks, copyrights, and patents.

Trademarks are used to identify products or services. They can be words, logos, or slogans. Copyrights protect original works of authorship, such as books, music, and artwork. Patents protect inventions.

Failing to protect your intellectual property can leave you open to costly legal battles. It can also prevent you from being able to stop others from copying or imitating your product or service.

5. Have data privacy and security policies in place

If you collect, store, or use customer data, you need to have data privacy and security policies in place. These policies should outline what data you collect, how it’s used, and how it’s protected.

The General Data Protection Regulation (GDPR) is a set of regulations that went into effect starting on 1 January 2021 in the UK, following its amendments to coincide with the UK’s status being outside the EU. It requires businesses to protect customers’ personal data from being mishandled or stolen.

6. Set up business financials correctly

The way you set up your business financials affects your taxes and liability. For instance, if you commingle personal and business funds, you could be held personally liable for business debts.

It’s important to have a separate bank account for your business and to keep excellent records of all your income and expenses. You should also consult with an accountant or tax advisor to make sure you’re taking advantage of all the tax breaks and benefits available to businesses.

7. Be careful with marketing

Making misleading claims in your marketing and advertising can get you into hot water. The Advertising Standards Authority (ASA) is the UK’s advertising regulator. They have the power to order businesses to change or withdraw their ads if they find them to be misleading.

Some of the most common misleading claims involve false or exaggerated claims about a product’s benefits, results of user testing, or the credentials of the people who endorse the product.

8. Understand product liability

If you sell products, you need to be aware of product liability law. This area of law governs the rights and responsibilities of businesses that sell products.

Under product liability law, businesses ensure their products are safe for consumers. If a product is defective or dangerous, the business can be held liable for any injuries or damages that occur.


No matter what size your business is, you need to be aware of the complex legal landscape. By understanding commercial law and how it applies to your business, you can protect your company from costly mistakes and disputes.

Adam Hansen

Adam is a part time journalist, entrepreneur, investor and father.