The image of a company remains one of its most prized possessions. A company’s brand image can take a battering due to many different factors, including adverse publicity from a legal dispute.
Therefore, it is in a company’s best interest to manage legal actions in as wise a manner as possible.
A look at some of the most common business mistakes
Forbes looks at legal mistakes for startups and newer companies, but the lessons could apply to most companies. Business partners, especially during initial discussions, should take special care to hammer out the details of the partnership. This includes discussing the terms of equity sharing, the roles and responsibilities of the founders and the vision of the company. Several other mistakes could lead to legal issues down the road:
- Choosing a company name that has trademark issues
- Failing to consider tax implications
- Failing to maintain proper corporate and HR documentation
- Ignoring intellectual property concerns
- Failing to adhere to responsible hiring practices
A company should avoid oral agreements in nearly all areas, and this is true when hiring employees. A carefully drafted letter should spell out the details of the hiring, including the pay scale, the hours of work and the responsibilities of the employee.
The importance of contract concerns
While many issues could lead to trouble, the importance of clear contracts remains one of the larger problems for companies. Several practices can help eliminate several legal problems. One solution is to make sure the contract minimizes promises about a product. The language of the contract should include a “force majeure” clause in the case of unforeseen events. A well-written contract can protect a company’s image.