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What Are Common Legal Issues That Businesses Face?

Business owners often face legal issues that have the potential to cripple their businesses. Whatever the size of your business, it makes sense to hire a business law firm. A business law firm in Sonoma County can help you identify, prevent, and circumvent potential legal issues.

We have compiled a list of some common legal issues almost all businesses are likely to face at some point.

Choosing the Wrong Business Structure 

When starting a new business, many entrepreneurs focus heavily on developing their product range. They do not realize the importance of choosing the right business structure. The wrong business structure can have serious tax liability issues.

Establishing the right business structure will save you legal and tax headaches down the road. Some business structures include partnership, sole proprietorship, corporation, and Limited Liability Company (LLC).

Each legal structure has its advantages and drawbacks. Your business law firm in Sonoma County will help you weigh the pros and cons of each type to enable better-informed decision-making.

Employee-Related Legal Issues  

Misclassification of Employees 

Many businesses wrongfully classify employees as independent contractors to avoid buying workers’ compensation for them. The Department of Labor requires businesses to classify their employees (except subcontractors) correctly. Criminal charges can be brought against businesses that fail to adhere to employee classification norms.

Full-time employees: A full-time employee is someone who works more than 30 hours/week. Companies are obligated to provide their full-time employees several employee benefits such as workers’ compensation and health insurance.

➢ Part-time employees: These employees typically do not work more than 30 hours a week. Businesses do not have any obligation to provide these employee benefits.

➢ Independent contractors: An independent contractor does not regularly work for an employer. They are self-employed and provide goods or services under an agreement. They are not entitled to receive employee benefits.

Employee Termination 

Employee termination can be a contentious issue, especially when an employee claims wrongful termination or unfair dismissal. To steer clear of legal hassles, spell out the terms of employment clearly in employment contracts.

Explain what can lead to termination of employment. Follow due process while terminating an employee. Provide an adequate notice period. Instant termination is possible in cases of gross misconduct such as employee theft, fraud, or assault.

Employee Discrimination and Harassment 

Former, current, or even prospective employees can sue a business on the grounds of discrimination related to hiring and termination. An employer sued for discrimination will be required to prove that they follow fair hiring practices and chose the most qualified person for the job and that the candidate’s race, color, or sex did not influence their decision.

Intellectual Property Protection  

Business owners must take steps to protect their intellectual properties to prevent others from reusing, distributing, or claiming them as their own. IP cases can be messy and drag on for years. If you have invented something, get a patent or a trademark to protect your brand. A copyright can be used to protect original works of authorship.

Johnston Thomas Law is committed to helping business owners steer clear of legal hassles. Our team will ensure legal compliance. To schedule a consultation, contact us at (707) 545-6542.

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