The legal aspect of running a business can be complex. Business law dictates how companies should be formed and sets non-negotiable rules all employers should follow to run a morally sound company. Without proper awareness of tax regulations, intellectual property and workers? rights, for example, you could face the loss of ?13.6 billion a year in court battles.
This section will help you navigate these complexities, from tax regulations, intellectual property law and other key legal elements of growing your business.
Larger companies have the resources to employ legal assistance full-time to deal with structural and compliance issues. For SMEs operating on less manpower and smaller budgets, a comprehensive understanding of business law is the ultimate weapon to success.
While you don?t need to become a law guru, there are specific areas of business you need to research and focus on.
Workers’ rights: What do I need to know about employment law?
Employees really can make or break your business. Workforce happiness, experts say, tends to increase productivity by around 12%. When members of staff believe they have been wronged ? and have a good and legitimate case to lean on ? you could end up parting with some of your much-needed cash. After all, with the abolishment of employee tribunal fees, claims have increased by 90%.
Holding someone back on the basis of their race, background, disability or gender, paying unfair wages, and an unwillingness to offer the right amount of holiday entitlement and maternity, paternity or shared parental leave, all go against the Employee Rights Act 1996. And as the gig economy steadily grows, employers must read up on the rights of independent contractors.
Much of what you need to know in regards to employee law is grounded in ?understanding human emotion?. It can likewise be boiled down to contracts, performance and punishments ? and ensuring you stick to those guns no matter who you?re addressing.
No one wants to acknowledge that some employees don?t do their work or resort to bullying. That being said, have grievance and disciplinary procedures ready for when the occasion arises. But here?s the tricky part. Always do your research and keep notes of your investigations. If someone?s concerns fall on deaf ears, you could find yourself in court and with a new position to fill. Sometimes these claims can be unfounded though.
Either way, there are certain procedures that should be followed and questions you should ask yourself before releasing an employee, even if their performance is sub-zero.
Failing to handle situations with finesse and care will lead to unfair dismissal charges. Courts will take the ACAS code into account and may award employees monetary compensation.
Intellectual property law, copyrights, trademarks: Be in the know
SMEs that overlook the importance of intellectual property (IP) can put their products at risk of counterfeiting. These counterfeits are often sold at a minimally discounted price and look authentic, making it easy for consumers to confuse them with the real deal.
Of course, there are processes you can put in place to ensure your products aren?t stolen. Take copyrights and trademarks, for example, both of which are worth the price you need to pay. Where copyrights are more geared towards literary and artistic means, trademarks protect assets that define a company. Like a logo ? or product shape.
The latter has become well-known in the confectionery sector. We?ve seen Nestl? attempt to register the Kit-Kat bar?s four-finger shape, not to mention Mondelez?s go at preventing anyone from using the shape of its Toblerone chocolate.
But there?s a reason why both companies have failed ? and it proves an important lesson for SMEs. In order to monopolise a product by means of a trademark, you must be able to show consumers will recognise its shape, colour, and so on, as a badge of origin.
What do I need to know about GDPR compliance and HMRC updates?
The fast pace of digital evolution means data related law and compliance issues are changing all the time. Recent advancements such as the GDPR act need to be adhered to in a calm and concise manner. Businesses must be clear about the data they are using from consumers and why.
Clearly communicating the message of consent to customers means they understand what they are signing up to. This way, the chances of customers reporting your business for unlawful use of data is lessened through clarity of messaging. This will prevent fines ? a hefty ?20 million or 4% of annual global turnover ? and damage to your company?s reputation.
The same awareness goes for keeping up to date with tax regulations and HMRC investigations. A benefit of being clued up includes knowing the commercial benefits that SMEs can claim. For example, you could be eligible for additional benefits like tax relief.