Here in Books are Life, we will look into the top 3 mistakes in business law. Without further ado, these are the following:
Lack of a succession plan
Most of the privately owned businesses or companies don’t have a plan of their ownership and management when the current owners and the other top managers leave the company. An agreement can help determine the next appropriate step for the company according to the law. This agreement should be in form of buy/sell agreement. A power vacuum might affect the company in a negative way.
I understand that some companies have grown attached to some very important people who have literally turned around the company. Their corporate management and leadership styles are amazing but what happens next when probably the unexpected act of God takes place? According to research 55 percent of the businesses have no succession plan should something happen to the management and other executives. Businesses and organizations should not be caught off-guard. This is why the succession law with the help of quality legal representation comes into play.
Lack of a succession plan also puts the company into danger of being denied funding from the financial institutions, this is because financial institutions demand a clear structure of the company’s management during that period they will be financing them.
Lack of Intellectual property protection
Many inventors and entrepreneurs are working hard to develop processes and products but the major problem is the failure to protect their original ideas and products. It’s good for the entrepreneurs to understand the process and the different types of intellectual property and the whole process of registering your property. It’s also good to know some ways to protect your intellectual property.
Under this branch of law there are also issues to do with copyright protection and patent protection. Patents protect the original ideas and concepts so that they cannot be reproduced without the consent of the owner. Therefore in summary you need to obtain a patent through an application immediately after the conceptualization of the idea. It should not be later than one year otherwise it will be deemed null and void. This process requires quality legal representation from a lawyer vast in such matters as succession.
Lack of knowledge in litigation costs
Businesses find themselves entangled in law suits resulting from their operations or nature of business. However this should be the last option for any business, reason being that it is very costly and tends to drain away the companies’ resources. Before embarking on this tedious legal process, any company should seek advice from legal experts so that they will help in determining all the collateral effect and costs involved.
Companies that are not established under clear laws such as the human resource laws implementation may end up being sued due to various reasons. In the course of their operations they may terminate an employee (s) and this would lead to a court case. Therefore the management should be well vast or at least have a company lawyer to be advising them on matters patterning litigation and how to avoid them as much as possible.
Litigation costs end up destroying the business networks and relationships that have taken years to build. In cases where court proceedings of certain companies are publicized, this tarnishes the company’s corporate image. This will be felt even in the price of its share in the stock market which might see it dropping significantly.
The Bottom Line
Naturally, if you think you will eventually face some legal cases or if you already are facing one or some, it is important to seek for assistance by a legal professional. If you live in Houston and you are in the middle of a divorce case, you might as well look for a Houston based divorce attorney rather than representing yourself in the court. The same goes for business law cases, a lawyer who is based in your area will definitely get the job done gracefully.