The big business world is incredibly complicated, and navigating through it can be overwhelming. There can be plenty of instances that can give rise to a plethora of legal issues left and right, and if you’re not careful, you might find yourself in a pinch you won’t be able to get out of easily.

It’s important to know what the most common issues that businesses encounter are to know how to steer clear of them when the time comes.

  1. Issues between shareholders

Shareholders can be anyone from friends and family to corporate acquaintances. All businesses start with shareholders in good terms, but because of the nature of running a business in itself, there will inevitably come a time when you and your shareholders may disagree. There can be a clash of ideas and personalities, or disputes that may arise due to differences in opinion. There can be issues on financial shares, as well as disagreements on the future of the company. There may come a time when you no longer have the same shared vision from when you first started the company together. Whatever the case may be, disagreements between shareholders are inevitable.

When something like this happens (and no, you shouldn’t fall into the trap of thinking you will never disagree because you just get along that easily), you should draft a solid shareholders agreement from the get-go. In this document, you can include in detail how the shares will be divided, how disputes can be managed, what the shareholders’ rights and responsibilities are, and how to go about circumstances when a shareholder wishes to leave the company. Everything should be written down in an official document to avoid having problems later on.

  1. The wrong corporate type

A mistakenly established business structure can also spell doom for the company. While most start-ups think about their core products and services first, it’s important to remember that you should have the right corporate form to avoid legal disputes in the long run. Is your business going to be a sole proprietorship, a corporation, a partnership, a limited partnership, or a limited liability company? These may seem unnecessary at first, but establishing the structure right off the bat will save you from stressful legal issues further down the road.

  1. Employee lawsuits

A majority of the lawsuits from employees can be avoided if only businesses have clear ground rules on everything that goes on inside the workplace. Employees need to be managed well from the very beginning even if the business starts out as an informal organization. Employment contracts must be clear, as well as health and safety guidelines. The handbook for workers must be updated. There should be provisions on how to handle workplace accidents. You should also have clear guidelines on intellectual property issues and trade secrets so that you know how to go about any kind of breach. All of these official documents must be reviewed by specialized lawyers to make sure that everything is in order before you even begin your operations.

CategoryCivil law

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