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Business Law for Small and Medium Enterprises

Starting and running a small business requires a wide range of skills and nerves of steel. It is not for everyone, and even successful entrepreneurs face failure from time to time. To help you stay ahead of the curve, this Small Business Law section covers everything from obtaining financing and hiring employees to choosing the right insurance policies and submitting taxes. .

Business Law for SMEs

Those who operate small businesses typically use many different permits and licenses, but they also need to know when and how to seek help.

What makes a business a “small” business?

A small business owner can operate a convenience store, plumbing service, salon, fast food franchise, or virtually any type of business in a given field. Although there is no clear definition, small businesses share some common characteristics. They are independently owned and operated, organized for profit, and not dominant in their field, as defined by the US Small Business Administration (SBA).

The vast majority of businesses in the US are considered small businesses, employing about half of all workers in the country.

What legal issues do small business owners typically deal with?

All businesses will encounter certain legal issues, such as questions about taxes or drafting contracts. But the legal obligations and risks of a small business owner generally depend on the type of industry, business model, inherent risks, state laws, and many other considerations it faces. It is always best to consult an attorney before opening a store, but anyone starting a small business is likely to face one or more of the following legal problems:

  • Choose a legal structure (such as a partnership, limited liability company, or corporation);
  • Hiring and managing employees in accordance with state and federal employment laws;
  • Protect inventions and trademarks through intellectual property law;
  • Extension of credit and collection of amounts due in accordance with federal laws;
  • Comply with health and safety regulations when constructing or preparing a job site;
  • Maintain the required level of workers’ compensation insurance coverage.

How can an attorney help my small business?

While small business owners act in a number of capacities, the successful entrepreneur knows when to ask for help. This is especially true in legal matters, which can sink a business if mishandled or ignored altogether. Some things can sometimes be done without an attorney, such as creating a legal partnership agreement, filing necessary tax forms, and drafting contracts with partners.

However, some issues are too time consuming, too complex, or too risky to handle without the care and expertise of a business attorney. These include defending against lawsuits for the wrongful termination of former employees, making a “special allocation” of profits and losses, or negotiating to acquire the assets of another company. Once again, your legal needs will be unique to your business.

And while finding an attorney for complex legal matters is smart, hiring an attorney to help prevent legal problems from occurring in the first place can be even smarter.