The entrepreneurial environment can be challenging for business owners to traverse, especially given the responsibilities of running a business. Your ability to handle the wide range of skills and expertise expected of you – from advertising and sales promotion to financial planning and legal requirements – is critical to the success of any business. Therefore, understanding fundamental legal issues is essential to ensuring your business’s long-term viability and continued success. According to NorthStar Law Group, here are five of the most important legal considerations for any business;
1. Essential Considerations In Business Contracts
You should consider the following factors when drafting business contracts.
- The Overall Structure Of Your Contract
The three essential components of legitimate contracts are the offer, the agreement, and the exchange of a good or sometimes a service of value between the parties involved. In addition to these essential components, having supporting clauses to help fulfill your contract is crucial. For example, if one party offers to refurnish another party’s property and the customer agrees to pay $25,000 in exchange for the work, both parties have entered into a contract. Clarifying expectations and managing any delays or disruptions requires that the agreement cover all outstanding issues, including the timeline for the renovation service, labor standards, compensation, and dispute resolution.
- Including Practicable Remedies
Companies can go to considerable lengths to formulate beneficial agreements, leaving behind unclear or missing remedies. There is a misconception that one’s situation is safe as long as favorable terms are in writing. If no evident and pragmatic procedures exist and a breach occurs, the only “countermeasures” available may be unpleasant email conversations or litigation. On the other hand, litigation is costly and time-consuming, so it is unlikely that many business owners will pursue it.
- Be Careful With Ambiguous Wording
Ambiguity happens when a term or statement has more than one plausible meaning. Therefore, the structuring of contracts should be thorough and careful to avoid ambiguity and prevent litigation. For example, multiple parties may interpret the “dollar symbol” differently if your contract involves multinational companies. The location of changes and punctuation marks can also contribute to confusion.
2. Basics Of Employee Handbooks
Here are some critical components of employee handbooks;
- The Current Location Of Employees
An employee handbook should comply with all local, regional, and national legislation. Therefore, one of the most important considerations for a company is the location of its personnel. If a company has employees in different countries, the handbook should include the laws of each state.
National, state, and local legislation is often updated regularly; your employee handbook needs to be revised periodically to reflect changes in the law.
Several companies often adopt employment at their discretion policy. Moreover, it is common to affirm it in personnel manuals. The handbook should contain provisions to prevent the emergence of an unintended implied contract that would alter at-will employment. A discretionary employment relationship means that both the employer and the employee can terminate the employment relationship at their discretion, without cause, with or without warning.
3. Protection Of Intellectual Property
Trademarks, patents, and copyrights are the most common forms of intellectual property (“IP”). They often protect different areas of a company’s business.
Trademarks, for example, protect businesses and are primarily used to identify the provider of products or services. On the other hand, copyrights protect creative achievements such as works of art, novels, and music. Finally, patents protect inventions.
4. Why You Should Obtain A Trademark
Although some business owners may want to wait until their businesses are fully established before registering trademarks, doing so exposes them to the problem of trademark infringement. Trademark infringement can result in rebranding; this can be inconvenient and expensive for business operations.
Understand that trademark infringement occurs when a company uses a similar trademark to another company on a similar or comparable item. It also occurs when companies use marks that are confusingly similar to those of another business or on identical or comparable items. It’s only with a search that companies can know which trademarks already exist. Thus, they can avoid unintentionally infringing the trademark rights of other parties
5. Licensing And Assignment Of Intellectual Property
When transferring or acquiring intellectual property ownership, it is crucial to know the difference between the terms “licensing” and “assignment.” In licensing, the owner takes control and merely grants permission to other parties to use its intellectual property for a specified period. On the other hand, the owner transfers ownership rights permanently in an assignment. The distinction is similar to selling (assignment) and leasing (licensing) property.
Beyond that, copyright assignment is an essential standard document that companies need. Copyrights often remain with the person who created the product or work. For example, let us say a contractor develops a corporate logo for a company; they retain ownership of that copyright. This is true regardless of whether a company has made payments for the work. The underlying copyrights are not transferred immediately, but a valid contract is required to transfer the copyright.
That said, there are several complexities associated with business law. Nonetheless, with the assistance of a competent business attorney, you can rest assured that any legal matters related to your business are set.