With so many things to consider while running a business, it’s understandable that mistakes get made. There are some mistakes that you can learn from others. Here are some tips to avoid common legal pitfalls in company law.
Make Sure You Have the Required Documents
It’s essential to have written contracts with customers, suppliers, and your employees. This will help avoid any potential disputes, and provide you with legal protection.
These contracts should of course comply with employment laws, including those relating to wages and anti-discrimination.
Contracts should also be kept up to date. It’s good practice to review them annually.
Professionals such as business consultants and corporate solicitors can help ensure peace of mind when it comes to meeting compliance and avoiding contractual headaches.
Separate Business and Personal Accounts
Particularly in the cases of small businesses, it is sometimes the case that owners use business funds to pay personal expenses.
It’s good practice to open an account intended solely for your business, and use a separate debit or credit card. That business credit card can help your company build a stronger credit score.
You’ll also be ensuring greater personal protection. You don’t want your personal assets to be liable in the case of any litigation.
Separate accounts are also simply easier to manage: you can easily track business expenses and see whether you’re making a profit. You’ll also be more easily able to calculate your business’s taxes, and have an accurate record to show if you’re audited.
Protect Your Property, and Know What’s Protected
Copyright issues have been regularly discussed in the news in recent months since the advent of AI. Musicians, artists and writers have expressed concerns over their material being used to train AI models.
Your company may have patents and trademarks, and it’s important to protect this intellectual property. Failing to do so can result in loss of revenue, and may also lead to disputes with competition, so you’ll want to register these properties.
Some content, such as writing, art, and music is automatically protected under UK law. The material, rather than any ideas, is what is copyrighted. “Putting pen to paper” is what ensures protection.
Act Early in Disputes
Ideally, disputes will be avoided by anticipating potential problems and having clearly defined agreements with your customers, suppliers, and employees.
Disputes can be avoided by having dispute resolution agreements, which will ensure parties talk before disagreements boil over.
However, there may come a time when you have to deal with litigation, and in these cases, it is best to act proactively. You’ll want to consult an expert in the form of an experienced lawyer.
Keep It Confidential
Your contracts will likely include agreements relating to confidential information, but it’s important to know what’s actually confidential. Companies sometimes claim their list of clients is confidential, but supply this information publicly online.
Your employees also need to be aware of what they should keep confidential.
Keeping sensitive information in secure locations and using password-protected folders are common means of ensuring confidentiality.
