top of page
  • Anmol Trehin

Legal Landmines: Top 10 Legal Mistakes Business Owners Must Avoid

There is no finish line. There are only mile markers.” -Michael Ventura
Astre Legal, top 10 legal mistakes, business lawyer montreal, corporate lawyer, contracts, start-up business, entrepreneurs, Anmol Trehin

As a business owner, you wear many hats every single day. From managing finances to keeping employees happy, it’s not uncommon for most business owners to juggle multiple responsibilities at once.

As a result, all these activities can make it easy to overlook legal compliance. The consequences of neglecting legal matters, however, can be costly, including fines, lawsuits, and damaged reputations.


To help you avoid legal mistakes, we've compiled a list of the top ten legal mistakes every business owner should avoid.

1. Not Choosing the Right Legal Structure


Depending on where you are in your entrepreneurial journey, adapting your business’s legal structure is crucial for your success. In most cases, while a sole proprietorship may be a cost-effective way to start a business, as it grows you should consider whether you need to update its legal foundation.

In most cases, incorporating your business can offer many advantages. (Read more about the pros and cons of incorporating here) This includes liability protection and tax benefits. Without incorporation, you may be personally liable for any issues that arise. To learn more about the different legal structures read our blog on the topic.

2. Misclassifying Workers


It’s crucial that you properly classify anyone that works for you as either an employee or an independent contractor. This can have important tax and labour law compliance implications. Misclassification can result in back taxes, fines, and penalties.


3. Ignoring Intellectual Property Protection


Intellectual property, including trademarks, copyrights, and patents, is valuable. Neglecting to protect your intellectual property can result in costly legal battles and loss of revenue.


There are many ways to protect your intellectual property, including formal registration with the Canadian Intellectual Property Office (“CIPO"), and through legal agreements with the key people in your organization. For example, executing non-disclosure agreements is a good step towards ensuring your intellectual property remains protected.

4. Failing to Comply with Labour Laws


In addition to the Civil Code of Quebec, various labour laws, like An Act respecting labour standards, An Act respecting industrial accidents and occupational diseases, exist that are designed to protect employees and provide them with fair wages, benefits, and good working conditions. Ignoring these laws can result in costly lawsuits and negative publicity.

5. Not Having Proper Contracts


Contracts help define the rights and responsibilities of parties involved in business transactions. Failing to have proper contracts can result in disputes and legal issues.

The most important business contracts every business should have include: lease agreements, employment contracts/independent contractor agreements, shareholders’ agreements/partnership agreements, and service contracts.

6. Neglecting Online Privacy Policies


If your business collects personal information from customers, you must have a clear online privacy policy. In Quebec, businesses are subject to An Act respecting the protection of personal information in the private sector, which was amended in 2021 by Law 25 (formerly Bill 64) An Act to Modernize Legislation Provisions Respecting the Protection of Personal Information, and the federal Personal Information Protection and Electronic Documents Act (PIPEDA).


So what do you include in your privacy policies, and more broadly, your privacy practices? Information on what information is collected, how it is used, and stored. Failure to have a privacy policy can result in legal consequences.

Contact us today to discuss your online privacy policies. We can help draft yours.


7. Not Having a Plan for Disputes


Disputes can arise in any business, and having a plan in place to resolve them can prevent costly legal battles.


8. Not Staying Up-to-Date on Regulations


Regulations frequently change and failing to stay current can result in violations and penalties. In particular, Bill 78, An Act mainly to improve the transparency of enterprises is an important one impacting all businesses operating in Quebec. Read about it here.


9. Failing to Address Workplace Harassment


Addressing workplace harassment is not only a legal obligation, but it also creates a safe and inclusive work environment. As an employer, businesses are required to implement a psychological or sexual harassment prevention and complaints policy. A guide to help your business get started is available on the CNESST website.

10. Ignoring Data Security


Cybersecurity breaches can result in the loss of customer data, legal liabilities, and damaged reputations. Proper data security measures must be taken to avoid these risks.

Conclusion


In conclusion, avoiding these legal mistakes can save your business from significant financial and reputational damage. As a business owner, it's essential to seek legal advice when necessary and stay informed about legal issues relevant to your business. By prioritizing legal compliance, you can protect your business, employees, and customers.


If you're feeling overwhelmed by the legal requirements of running a business, you're not alone. Many business owners struggle to keep up with the ever-changing legal landscape and may not have the time or expertise to navigate complex legal issues. That's where our business law firm can help.


Commenti


bottom of page