Very few entrepreneurs are willing to acknowledge the legal realities of running a business. Many are simply unaware of it. While this is mostly for good reason, ignorance is not an excuse. The fact that most legal documents are worded in complex and difficult-to-understand language makes it an uninteresting aspect of business for many founders.
If you're about to start your own business, you should get familiar with some of the legal situations you may find yourself as an entrepreneur. Having a pre-existing knowledge of some important legal context will help you avoid mishaps that could cost you thousands of dollars and help you stay prepared in the face of a legal standoff in your business.
State Tax Laws
As a small business owner, paying your taxes to the government at the appropriate time is an obligation. However, as many still find it more convenient to avoid paying their taxes, states have laws that are established to punish businesses that default on their taxes.
Getting familiar with the tax laws in your state can be very helpful in several areas. And indeed, the potential cost your business could incur if found guilty of tax invasion can be quite high.
Educating yourself on what are permissible under the law regarding business and taxes is necessary for every entrepreneur in this age. According to Mark Heckele, an attorney at The Law Firm of Harlow Spanier and Heckele LLP, being conversant with the recent laws and bills guiding taxes in business is necessary for small and large business owners.
"Use the many available resources available online today to keep yourself educated about the tax laws in your state," he said. He believes the cost of avoiding a legal case bordering on tax evasion is nothing compared to the cost of actually fighting one.
Merger and Business Acquisition Laws
As an entrepreneur and business owner, you'll get to the stage where your business will either be acquired by a bigger one or you may want to acquire a smaller competitor yourself. These strategies are often considered in order to strengthen the hold of a business in the market.
However, for the sake of fair practices, there are laws set up to guide the process and prevent some mammoth companies with unlimited access to finances from stifling innovation by getting rid of competition totally.
Cases like antitrust charges and monopoly lawsuit are scenarios larger businesses that go on merger and acquisition spree tend to face. For a smaller business, on the other hand, you want to make sure you're dealing on the safe side of the law before entering into any merger or acquisition deal. "A possible merger and acquisition is something any company should entertain", says Mark Heckele. "And competent representation should be retained to make sure the agreement is right for you and you understand your risks and potential tax liability."
A good place to start would be reading up on relevant merger and acquisition laws from sites like the American Bar Association website.
Patents and Trademarks
Getting a patent or trademark for your technological innovation and design or intellectual property as the case may be is a step that every entrepreneur must take seriously. There is a legal process that must be followed to ensure that your patent request is approved by the responsible law body.
However, it is crucial that you understand and differentiate materials that require copyright protection from patents and trademarks.
To go over it quickly, below are the purposes the three different applications serve:
• Copyright: for authors of intellectual works such as written documents, research or novels. Since these materials could be sold for profit, a copyright protect gives the author or owner of the material's copyright exclusive right to profit from their work.
• Trademark: a trademark is used in cases of slogans, words that a brand uses to promote itself or its goods, logos and marketing signs.
• Patent: this is an application granted by the Patent and Trademark office to inventors for an invention, which gives them the exclusive right to the invention even when it becomes public knowledge.
Getting familiar with legal aspects of business will help you when you eventually run into a scenario that requires the involvement of a legal expert. Your understanding of the law, if nothing more, will help make communication between yourself and your legal representative easy and smooth.