5 Legal Issues That Could Sink Your Business

By Guest Post

By Tony Crighton

Owning a business comes with many rewards, but it also carries its fair share of troubles and issues. Of all the issues that a business owner may face, perhaps none are more problematic than issues of a legal nature. This is perhaps because legal issues have the ability to easily kill a business, and depending on the nature of the issue, can affect the business owner in their personal capacity as well.

Laws are obviously put in place for the better and proper functioning of society, and this is also the case regarding laws that govern business activities. Abide by these laws and a business may freely go about its activities uninhibited. Break them and the business and its owners are likely to get an arm of the law looking into their business affairs, and very possibly sanctioning the business in one way or another.

The following are five potential legal issues that every business owner should be aware of:

Employment laws

Even the individual who starts out as a one-person business may eventually end up employing additional people as the business grows. Once this happens, the business has the added responsibility of ensuring everything regarding its relationship with its employees is handled above board and in line with any and all tenets of the law.

From number of working hours and work environment to time off and dismissals, there likely is a law that regulates these actions. It is up to the business owner to ensure he or she is aware of whatever these laws might be, and to ensure their business is not in violation of them. Ignorance of the law is no excuse.

Whether you have one employee or one hundred, any labor laws you violate could potentially land your business in trouble. As a matter of fact, if you violate a labor law, the more employees you have, the more severe the penalties may be.

Ethics laws

Ethics laws are arguably some of the more easier laws a business may unwittingly run afoul of without realizing it is doing so. This is because ethics can be a “grey” area—what might be considered ethical to some may be considered unethical by others. If a business owner does not consider a business-related issue to be unethical, he or she may continue operating in such matter, when the law clearly thinks and says otherwise. And as the law is no respecter of persons, the person who conducts any unethical activity prohibited by law will likely be punished if caught.

Within the context of a business, ethics can apply to practically every functional business area: finance, human resources, sales and marketing, contractual agreements, and much more. Thus, it’s easy to see how a business easily can run afoul of an ethics law without knowing it.

One example of an unethical business practice is price fixing. Three local bakeries, for instance, may jointly decide on charging the same price for the bread they sell. A company ordinarily determines the price of its products or services, but when a number …read more

Read more here:: allbusiness.com

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