5 Legal Hurdles Every New Business Must Face

5 Legal Hurdles Every New Business Must FaceEvery new business needs to overcome five crucial legal hurdles. Even if these legal challenges may not always pose an immediately apparent crisis, the sooner that they’re dealt with, the better. The bigger that a business grows without properly accounting for all of the potential legal pitfalls, the greater of a risk posed to its survival once it grows it a certain size. If you want to protect your business in the long term, you’ll benefit from taking the reality of these legal hurdles to heart as soon as possible.

No Founder Can Afford The Cost Of Negligence

The statistics for new businesses plainly illustrate just how crucial it is that absolutely no corners are cut when it comes to covering legal bases. According to survey data collected by Fortune, nine out of every ten startups will fail for one reason or another. Considering that the odds are already stacked against them, new business owners have no wiggle room when it comes to ensuring that their legal hurdles are accounted for; it is truly do or die.

Employee/Contractor Identification Confusion

A new business owner is oftentimes eager to hire whatever help is willing to come aboard, but there needs to be correct identification of what roles are legally held by the staff. An employee is a regular worker, and a contractor is part-time; knowing the difference can save new businesses from a world of legal migraines if there are issues with overtime and taxes down the line.

Incorporation Issues

One of the most pressing issues for a new business is to choose the proper legal structure, and unfortunately, many new business owners miss the mark when it comes to this highly important step of the process. Choosing the right legal structure will directly relate to the ability to get new investors. Legal structure will also determine personal liability in case of any suits filed by former employees or customers.

Intellectual Property Law Compliance

No matter how minor it may seem, there shouldn’t be any part of a new business’s content that violates any other person’s intellectual property; at the same time, the business’s own intellectual property should be protected as well. Patent and trademark whatever needs to be protected, and make sure that all media (images/photos/videos) are only used with full legal rights.

Poor Customer Data Protection

New businesses might find it slightly difficult to stretch their available capital in all of the necessary directions, but frugality is no excuse for leaving customers’ information at risk. Small businesses that have just started out are prime targets for hackers looking to exploit the carelessness of inexperienced teams, and if the worst comes to pass, the company will be left to bear the full brunt of the legal consequences.

Harassment And Discrimination Suits

Discrimination and harassment charges can bury a company in no time at all. No matter how confident a new business owner may be in the character and dependability of their staff, there’s no way to micromanage the infinite possible incidents that could arise at any time from volatile human emotions and miscommunication.

Make sure that all levels of the ladder understand that discrimination won’t be tolerated in any form. Hold frequent meetings on workplace conduct with detailed minutes, and communicate thoroughly with the human resource and legal departments on the incident protocol.


New businesses are swiftly destroyed by the above legal hurdles with frightening frequency. When it comes to surviving these challenges, it’s not a matter of hoping that they don’t occur, but a matter of preparing as though they’re inevitable. These challenges are usually the last thing on the average ambitious new entrepreneur’s mind, which is why they should be the first thing on the mind of a new business owner who wants to come out on top.

About The Author

Jessica is a professional blogger who writes for Faxage, a leading company that provide Internet fax service for individuals and businesses.

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