4 Areas Of Law Every Entrepreneur Must Learn More About
Litigation issues are sometimes an unavoidable aspect of business operations, irrespective of size, location, or industry. According to Statista, US companies have spent a total of $22.8 billion on litigation this year. In 2005, 90% of American businesses were engaged in at least one form of litigation, with the average company having thirty-seven concurrently running lawsuits! This puts the number of litigation cases faced by billion-dollar corporations at any given time at about 147. These run-ins with the law typically tend to drain companies of valuable resources. As such, you need to know some crucial areas of law to avoid financial loss and damage to your business and its reputation. Here are four legal areas you should be abreast of to avoid litigation.
Employment laws
The National Employment Law Project in 2009 revealed that American businesses take a lot of vital employment laws for granted. The study found that 26% of workers received less than the minimum wage, with 60% receiving underpayments by more than a dollar per hour. Overtime law violations were also rampant, with more than one-fourth of respondents admitting to working more than forty hours weekly. 76% of these employees did not receive the mandatory overtime rate. A study by Hiscox revealed that businesses had an 11.7 % chance of facing employee-claim related litigation. Therefore, you should strive to be aware of and comply with vital employment laws to avoid associated litigations in the future.
Intellectual property rights
Intellectual property laws are one of the most complicated rules to navigate for all types of companies. These laws are not usually considered during business strategy planning, but they are severe and could have potentially devastating financial and reputational effects on your business if you violate them. According to Reuters, in 2014, the US Supreme Court heard the highest number of intellectual property cases in its history. The study from Reuters also indicated that Judges were struggling with most of these cases due to the complex nature of the modern-day business and the difficulty in applying old law to new technology. Therefore, it is vital to be updated with all intellectual property laws in order not to violate any.
Criminal laws
The technicalities of criminal laws that apply to American businesses are quite extensive. Under federal and state laws, corporations are legal persons capable of committing crimes and facing accountability accordingly. Corporate Criminal Liability laws can hold companies liable for crimes if employees and agents were responsible for the acts and were acting to benefit the company. In cases where employees deviated from official duties to commit a crime, courts consider a wide range of factors but do not hold employers liable for the individual’s action. Facing criminal indictments for various white-collar crimes can be challenging for companies. Thankfully, many criminal defense attorneys dedicated to their clients exist to help you sail through the rigors of the justice system.
Tax laws
The U.S. government reports indicate that tax revenue lost from various evasion schemes at the federal level amount to about $458 billion annually. The government aggressively pursues tax-related issues at all levels, and there are substantial financial penalties in place for offenders. In 2005, for example, KPMG was found guilty of fraudulent tax shelter schemes and agreed to pay about $456 million in fines and penalties to the government. Therefore, you need to familiarize yourself with state and federal tax laws relevant to your business structure to avoid getting in trouble
