Home Business 3 Common Legal Issues for Companies and How to Avoid Them

3 Common Legal Issues for Companies and How to Avoid Them

by Olufisayo
Common Legal Issues

Legal problems can be costly and time-consuming for companies to deal with. Unfortunately, however, often they are an unavoidable part of running a business. It is therefore important to be aware of any common legal issues corporations face, so you can handle them in the best way possible. Here are just a few it is worthwhile to be familiar with.

Operating an Unregistered Business

In general, it is a legal requirement in most countries for any company operating there to be registered with the national government. This is so the company can be monitored from a legal and taxational perspective.

Ignoring these laws is therefore a common way businesses can knowingly or unknowingly break the law. Similarly, certain areas of business, such as in the sale of restricted or imported goods, require specific licenses required to operate in.

Consequently, businesses can find themselves in legal trouble, if they fail to secure proper licenses or permits from the government. However, countries and regions vary in regards to their laws controlling business registration and licensing.

Canada, specifically, allows for companies to not be registered with their respective province if the business owner is the sole proprietor. You should therefore check your region’s laws in regards to this, to ensure your company is not infracting on any applicable laws.

Wrongful Termination

Once you have run a business for a long enough time, it is likely at some stage you will hire someone that is not suitable for the position. It may be the case that they have misrepresented their experience and expertise on their resumé and in interviews, or that they are not pulling their weight in terms of work.

In the worst-case scenarios, you may be dealing with individuals who have behaved in a discriminatory or inappropriate manner. If you do ultimately decide to dismiss an individual from their job, it is important you are aware of your region’s laws concerning employee dismissal.

Wrongful termination lawsuits can be costly and also potentially damage your company’s reputation, so avoiding them should be a priority for every business owner.

Fortunately, there is plenty you can do to reduce your likelihood of being sued in this area. First, make sure that the terms of conduct for employees are made explicitly clear to them prior to their hiring.

Second, make sure you keep a record of all disciplinary action you take, so you have sufficient evidence to prove your dismissal wasn’t the result of malpractice. Finally, consider consulting with a lawyer specializing in corporate law, such as Mr. Gibbs, to ensure that your employee termination is not in violation of any specific employee rights laws.

Data Protection

Legal regulations applicable to businesses are always changing, and it is therefore important that companies continuously update their practices in accordance with any new laws.

In particular, many countries, including Canada and countries part of the European Union, are introducing laws regarding the processing, handling, and storage of personal data. The vast majority of companies will collect some sort of personal data, whether it be sales records or customer information.

It is therefore important that any data you collect is recorded and managed in accordance with any relevant legislation. This normally means getting consent prior to taking and using an individual’s personal data, as well as not supplying their data to third parties without authorization.

Photo by Sora Shimazaki from Pexels

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