Small business owners make legal mistakes all of the time, which often results in the downfall of a company. Without the proper knowledge, business owners find themselves repeating the same mistakes. The SBA (Small Business Association) stresses the importance of ending the circle of disastrous legal errors by investing in Continuing Education business courses, or by hiring a business consultant.

There are many resources for legal advice and information available on the Internet. If you think that you need professional legal advice consulting a lawyer is the best course of action. But here are a few common legal issues that you may come across.

Contracts or service agreements are a must for any small business. It is difficult to uphold a verbal agreement in court and therefore a well written service agreement can protect you and your business. The service agreement should clearly define all policies and agreements. It should provide protection for your company and its interests.

Start by listing the -scope- of the service. For instance, cleaning a home would take 2-hours. In those 2-hours, list -what- service and -how- long it will take. Include anything that may be a special request. Excluding a portion of the service could be a costly mistake. Drafting a contract takes time, but it is necessary.

Employment Termination- To keep overhead costs down, a major percentage of small businesses begins with a low number of employees. Staff members come and go, as business growth changes. It makes no sense to keep staff on the payroll if the business can-t support the wages.

Sometimes employees will threaten with -Unlawful Discharge- suits. It is important that each member knows they are an -at will employee,- which means they can be terminated at any time, or for any legitimate reason.

Hiring Independent Contractors - To avoid some of the hefty labor taxes, small business owners hire Independent Contractors to take up the slack. IC-s (Independent Contractors) are responsible for claiming their income and expenses and filing with the IRS.

Even though you may have hired an independent contractor the IRS may consider their job to be that of an employee-s. This means things could get complicated for you. Be sure to check what the IRS considers employee-s jobs before hiring an independent contractor.

When starting your business you need to know how your business is classified. You may be a sole proprietor or perhaps in a partnership. Each of these designations carries its own legal ramifications. For instance as a sole proprietor you are vulnerable to legal action taken against your company.

A better choice would be to start a business as a limited liability corporation. This means that if your business is sued, any personal finances and funds can be excluded from the ruling.

Intellectual Property Issues - Even low-tech companies have intellectual proper issues that directly affect the long-term success of the business. Pay close attention to confidentiality and invention assignment agreements, registered trademarks, and copyright notices. Protect the company-s trade secrets adequately.

Record Keeping - Improper record keeping can cause serious problems. Accurate accounting records are essential if the IRS is the least bit suspicious about the company-s financial records. Invest in a bookkeeper or an accounting program to make it easier to keep account of your daily transactions. Also, organize files to be readily accessible in case of an IRS audit.

Experienced Corporate Attorney - No matter what entity a business operates under, a growing business will face issues that require the service of an experienced attorney. Unfortunately, cost is a huge issue for most small business owners. Corporate attorneys do charge a much larger sum for their services.

Do your research and compare fees. The long term relationship you build with your corporate attorney will have its value. All businesses should make an investment in a -good- corporate attorney.

Without a doubt, a business should run erring on the side of caution. Choosing to operate without the proper knowledge on business laws and business ethics, will lead to disaster. Check with an attorney before pursuing a business and start on the right foot.

If you are at all unsure about any legal matter be sure to consult your attorney. Errors when it comes to your business- legal issues are sure to lead to disaster.

About the Author:

Nyall Bakk runs several successful niche businesses, as well as Advertising WorldWide - the best resource for quality PPC traffic. You can exchange links (which will help to help promote your business) by going here: http://www.advertisingww.com/links

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