Legal Issues You Need To Be Aware Of Starting A Business

January 13, 2024
4 mins read

Legal Issues You Need To Be Aware Of Starting A Business

By Business Desk

Sunday, May 1, 2016.

You don’t have to be a genius in your chosen industry to start a business. But you do need to know some of the basics of running a business. In a way, that’s more important than knowing all the ins and outs of your business. It’s  crucial that you know how to keep your company profitable. You also need to think about marketing as well as how the investors fit into the role of your business. At the same time, you don’t need to be an expert in the law to set up a company. But there are issues that you need to be aware of and that you need to understand. We’re going to run through a few of these and explain how they could create issues for you as the business owner. As well as this we’ll look at how to handle the problems that they present. Let’s start off with a simple legal issue. The setup of your company.

Contractual Agreements


Contracts play a big part in business, no matter what type of company you’re running. You’re going to be expected to sign contracts and form agreements with different business partners. But let’s quickly back up for a moment. Before any of that happens, you’ll first be opening the doors of your business. You’ll be moving forward with the possibility of establishing your company on the market. To do that, you will need to make sure that all the legal paperwork is in place. Otherwise, your business won’t be able to trade on the market, legally. You won’t be able to sell your goods and services. You won’t make a profit. Already, not knowing the law could have crippled your company.

But there’s more. When you do start signing contracts and agreements you’re going to be dependant on other businesses keeping up their end of the deal. In particular, you’ll need to do everything that you can to ensure that your business is protected from a back out. If a business backs out of an agreement you made, your company could be left hanging. That’s because they might have agreed to sell you with a material you need and now don’t have. Or they were delivering a service you were using to the benefit of your customers. If that suddenly gets taken away, you’re going to struggle to explain what happened. You’ll also start to bleed money.

To account for these contractual agreements, it’s worth having a lawyer on board in your business. You can either hire a full-time legal representative, or you can outsource the issue. But at some point, you will need to know you have a skilled legal mind on hand. Or at least, on the other end of a phone.

Premises Liability

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Another thing you need to be aware of when you set up shop is premises liability. Essentially, premises liability means that if you own a building, you’re responsible for anything that happens inside it. You can read more at That means if someone is hurt or injured, on purpose or by accident, you’re accountable. It doesn’t matter whether that’s a member of your staff or a member of the public. They can sue you for damages. Premises liability is essentially a banana skin for business owners. Almost every business owner slips on it at some point and that leaves them vulnerable. You see while you might have workers compensation, a member of the public is a different matter. They’ll sue you for all your worth. So how do you get around this one?

Well, your average lawyer might recommend two things. The first is to ensure that your business premises is as safe as it can be. Accidents are typically caused by hazards that have remained unnoticed by the employer. When this happens, it’s important for you to understand that ignorance is not an excuse nor a defense. If you should have known about the hazard you will still be legally liable. That’s the bad news. The good news is that a skilled lawyer will be able to argue that the accident could not have been prevented or that it was caused by human error. The other good news is that these types of claims very rarely end up in court. They’re settled outside for an amount in damages. Those damages can still be quite high, and that’s why you need to get your business insurance.

With full business insurance you’ll be able to make sure that if you are sued, you won’t have to pay for it. Your insurance company will cover the costs, in full. That’ certainly takes a load of the mind of the average business owner. But it’s not the only thing that you can be sued for.

Emotional Distress And Office Misconduct

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There’s more good news here. If an employee wants to sue their employee for misconduct they usually have to prove emotional distress. They also have to show that the employer did nothing to try and resolve the matter or that they caused it. It’s difficult to prove this even with top professionals on your side. But at the same time, you can still find yourself responsible for issues that employee may have suffered. If that happens, this is the type of case that will go to trial. Lawyers will sense blood in the water and they will try and take a pound of flesh. Again, it’s a difficult case to win. But that won’t stop them using other methods to make you pay up. Such as bringing the court case to light in the media. When this happens negative press could have a huge impact on future sales of your business.

That’s why you need to be very cautious dealing with your employees. You must always make sure your business is free from discrimination, bullying, and any other issue. It’s also important that employees do have someone to talk to if they have a problem. This doesn’t have to be you, but there does need to be a chain of command.

If you are aware of these legal issues, you can avoid the headaches they could cause in your business.

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