Running and operating a small company requires you to multi-task. Besides generating more sales and revenue, you need to make sure the company starts generating profits. As a small business owner, you also need to deal with some areas that don’t fall under your comfort zone. Legal issues is one of these important tasks.
Every successful small company relies on the services of a good lawyer for legal support and advice. However, there are times when you may not want to bear the expense of consulting a reputed lawyer. Due to this, you may plan to take care of everything yourself. This can lead to various mistakes. In this post, we’ve discussed 6 legal mistakes a small company needs to avoid.
Don’t Enter Into Verbal Contracts
A lot of non-attorneys don’t realize that it’s possible to enter into a legal contract without agreeing to things in writing. In some cases, even a verbal contract is considered to be binding. Many small companies enter verbal contracts on a regular basis. This is considered to be a big mistake. If it’s worth entering a contract, you need to make sure it’s documented correctly. In case you’re entering into a contract with suppliers or customers, you need to make sure all the terms are clearly set in a detailed written contract. This reduces the chances of a dispute in the future. Both parties can easily refer to the documented agreement.
Get Contracts Reviewed by Attorneys
One of the biggest mistakes is to draft a written contract on your own. Drafting a written contract is a skill developed over the years. When you try to draft a contract on your own, you tend to miss important clauses. This leaves the contract open to misinterpretation. It also fails to protect your interests. Before presenting a contract to the other party, you need to consult an attorney.
Read Before Signing
This mistake is quite obvious. You would be surprised to know that numerous people sign a contract without reading it. It’s important to spend some time going through the contract. You need to make sure the contract says exactly what you want it to say. You should make some sincere efforts to understand the contract.
Act in Accordance with Governing Documents
All companies have governing documents, which lay down the rules for Board of Directors, management and other employees. For instance, if you’ve chosen to offer a guarantee to another party, you need to make sure you work according to the process laid down to conduct this task.
Employees Should Act in Accordance with Fair Work Act
It’s worth mentioning that many small companies get into legal troubles for breaching obligations stated by the Fair Work Act. When you want to terminate an employee’s job or make him/her redundant, you need to make sure the company acts in accordance with the law. You need to work with an experienced employment specialist.
Last but not the least, payment of taxes is one of the most complicated matters related to business operations. Failure to pay your taxes in time is against the law. You need to make sure you understand all the obligations. You should work with an accountant and business lawyer to avoid any legal trouble.