Legal Checklist for Small Business Owners
With all the stuff happening in your business, admittedly you are swamped with lots of tasks. Too swamped, in fact, that you might even forget about taking care of the legal matters for your business. To keep things balanced, here is a legal to-do list, most especially for small business owners, to help you stay on track.
- Make sure all permits, licenses, and business permits are in order
Before anything else, make sure that the legal papers for your business are all in order. The kinds of documents you need will depend on the sort of company you’ll be opening and where you’ll be registering. It’s integral for your business to be compliant with all the documentary requirements in order for it to operate smoothly.
Here are some documents that you might want to take note of:
- Business license
- Business permit
- Health-related permits
- Fire permits
- Liquor license (if applicable)
- Construction licenses
- City permits
- Safety-related permits
Remember to process these documents as these will be the standard and basic legal documents you need for your business to run.
- Keep a proper record of accounting or bookkeeping
Part of the legalities of a business is the accounting of transactions. Any kind of business is obligated to keep a record of all kinds of business transactions on a yearly basis. This will also be required when you pay for your taxes, which is mandated by law. It is wise to hire accountants for this task just to make sure that you comply with all tax-related laws.
Do not forget to file income tax returns and the like. Forgetting to submit these will result in fines and penalties. The worst-case scenario is that the government can decide to halt your business operations for failure to provide these documents.
- Secure your intellectual property rights
The core of your business will lie in the intellectual property of your business. There are several reasons you’d want to consider getting a trademark, one of which is to have exclusive rights over an idea that you conceptualized so that other people can’t steal it from you. Some intellectual property rights that you might want to file are the following:
- Trade Secrets
Having these will allow you to earn money from royalty fees or commissions whenever investors want to use your product. So, don’t let your ideas go to waste and file these intellectual property rights.
Filing these is much more complicated than it looks. The wording for these kinds of documents will be a bit more detailed and complex. Hence, it is advisable to hire or consult a more experienced lawyer or a lawyer that specializes in intellectual property rights.
- Protect the rights of your employees
Most small businesses make the common mistake of forgetting about the documentation of their employees. Make sure that you are able to prepare the right agreements and contracts for each employee outlining all benefits, rights, responsibilities, and consequences. This contract will protect both you, the company, and your employee when the time comes.
It’s important to have everything written down to avoid complications, so that both you and your employee know what to expect from each other. You may ask a lawyer to help you craft the wording of the agreement and walk you through the process.
Privacy policies are often overlooked even though it’s a vital part of your business. Privacy policies are legal statements that outline how a business or company uses data collected from customers or users. Depending on the laws in your area, violation of privacy laws can be detrimental for your company. This is why it’s also important to comply with privacy laws.
- Hire legal counsel
Rather than hiring one lawyer for each type of work, it might be more convenient and practical for you to retain an in-house legal counsel to help you out with all legal issues at the onset.
If you are a startup or small business, you might especially be apprehensive towards this idea because of the substantial expenses. However, don’t overlook the importance of legal counsel because down the line, you can save millions from avoiding legal trouble. Having legal counsel on your side will be one of the best decisions you will be making in your business.
Running your own business will be tough and if you do not have your legal checklist in order, you might get more headaches than you expected. So, follow this checklist to keep you on track.