Not many entrepreneurs have a team of attorneys ready to help and give counsel on all business-related legal issues until mistakes happen. Just as entrepreneurs must have basic accounting and marketing principles, they should also comprehend business law.
Business owners should also have a reliable attorney to consult on legal matters affecting their business. This is one of the best ways to avoid business failure and expensive litigation. This article highlights the basics of business law that every entrepreneur should know to make the right business decisions without experiencing legal issues.
You might also like: A fresh take that complements what you just read.
Laws Around Overtime Hours
Most workers know that they should work for about 40 hours every week. Working more hours than these means they have worked overtime. Therefore, entrepreneurs should remember that these employees should be remunerated with overtime pay.
Many entrepreneurs may be tempted to classify employees as independent contractors to avoid overtime altogether, but this mistake could lead to legal troubles. Seasoned business attorneys can help entrepreneurs choose the right method to save money and avoid legal issues. Lawyers understand wage and hour laws better and can provide practical advice to entrepreneurs trying to save money.
Entrepreneurs must classify their employees accurately. If the business has non-exempt workers working past the regular work hours, an entrepreneur will need to include off-clock work, pay each employee for that time, and ensure that the payroll admin is updated on current wage and hour laws.
Vicarious Liability
Many seasoned entrepreneurs know they are held responsible when an employee harms others on their business premises. However, vicarious liability law has a caveat that tends to go unnoticed, and a legal mind is needed to avoid liability.
For instance, if an employee causes harm or suffers outside the company’s property at any time, the business owner can also be liable sometimes. However, they can only be liable if the harm occurred within the course and scope of the employee’s job requirements.
As an illustration, if an entrepreneur requests an employee to drop a package at the courier’s office as they go home, and the employee causes an accident while going there, the entrepreneur could be liable. However, the business owner might not be liable if the incident happens long after the assignment.
Intellectual Property Laws
A business owner might have a coveted product, a perfect logo, a unique website, and a business name. However, if any of these embody another person’s intellectual property, the entrepreneur will be forced to pay for using them without permission.
Intellectual property laws and regulations have three primary components. The first one is patents, which protect inventions from unauthorized duplication. Copyrights protect artistic creations while trademarks safeguard brands. Infringing on the rights to intellectual property is a red line and can be fatal to any business, considering the potential violations that range from injunctions to devastating monetary penalties.
Therefore, business owners should do research before launching products or choosing a logo. This ensures they are not using someone else’s intellectual property without permission.
Entrepreneurs do not necessarily need to enroll in law school to operate a successful and profitable business. They can prepare for the most common legal situations to minimize the risk of falling into common pitfalls.
Costly litigation that takes forever to close can cripple even the most promising companies. Therefore, entrepreneurs must learn business laws relevant to their companies to avoid legal challenges and financial losses.
Catch up on the latest updates anytime from 2A Magazine.
