You hear about it almost every day. Another company faced with a multi-million dollar lawsuit, brought forth by a former customer or employee. Another business owner facing charges for illegal practices (more often knowingly than not). Now fortunately, as a small business, your chances of being waylaid with a gigantic seven figure lawsuit are extremely low, though the possibility of being sued should something along the way be less than above board remains. And there is always the possibility that you’ve inadvertently (I staunchly refuse to believe anyone reading this would do so knowingly) broken a law somewhere along the way.
Now dealing with a lawsuit is a whole article unto itself (and I’m sure something I’ll come back to at a later date), but for today, let’s discuss how to avoid one in the first place. And the easiest way to do this, is to just…not break the law. If you don’t put yourself in a legally compromising position, any lawsuit brought against you will have no merit and fail, and you certainly can’t be brought up on charges if you didn’t break any laws in the first place. Now if that sounds mind-numbingly simple, that’s because it really, really is.
The idea itself is so simple I feel a little silly even typing it out. In practice, it’s far more complex than you would think. You see, in order to not break the law, you have to know it in the first place, which can require a fairly substantial amount of research.
To start, you need to establish which laws apply to your business in the first place. Are you hiring employees? Then you need to be familiar with local labor laws. Are you shipping anything into or out of your home country? Then you need to know import/export laws. Are you operating out of an office? There are laws for that. A retail location? Laws for that too. Are you working with contracts (and you should be)? Those are legal documents, which have a whole set of laws governing them. Even the act of simply accepting payment for your product or service has a whole set of laws surrounding it, as anyone who has ever paid income tax can attest to. For every aspect of your business, top to bottom, there is more than likely a law in place, and you need to be aware of all of them, in order to avoid breaking them. Knowledge is power, friends.
Now that you’ve established which laws you need to look into, you need to actually, well, look into them. Again, it sounds far more simple than it actually is. Visit your local municipal, provincial/state, or federal website, and start looking up laws. You’ll notice something almost straight away. They aren’t written in plain English (or your country’s language of choice). They are full of legal terms, written in the most needlessly complex way possible, to the point of becoming its own language (referred to as Legalese). Legalese is a language you will have to learn to speak to at least some degree in order to understand the rules and regulations governing your business. And learning a new language is not the easiest of things to do.
Fortunately, you’re not alone in this. One of the great things about starting a business, is that so many other people have tried to do it before you, and run into many of the same roadblocks you have, including the sea of pointlessly complex legal jargon you have to wade through. There are whole websites dedicated to presenting laws of all types in a far easier to understand format than what your local government presents them in. A simple Google search should be enough to provide you with a wealth of information, written in plain English. Be forewarned though, these are not official government websites, and as such, there is a chance the information may be out of date, if not entirely false. Use these sites to assist in understanding, but not as your primary resource. Your local business bureau should also have a wealth of information available in pamphlet form (if not on their website) as well. Community legal clinics and employment resource centers will also have at least some information available, translated from Legalese into a language you don’t have to go to an expensive school for the better part of a decade to learn to speak.
Alternatively, you can consult with a native who already speaks the lingo (in other words, a lawyer). Lawyers are more than happy to take a payment in exchange for explaining the law to you. I suspect that’s why it’s written in such a backwards way in the first place (as does whoever wrote the Wikipedia article I linked above).
Regardless of how you go about acquiring it, you are now armed with the knowledge of what you can and cannot do in order to stay within the bounds of your local laws. From here, essentially all you need to do is stick to that (and document everything in an orderly fashion), and you, your business, and your Personal Independent Earnings, are protected from any sort of legal pitfalls, allowing you to operate safely and effectively.