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Four ways to protect your business from legal problems

When starting a new business, or running an already established one, it's critical to ensure that the business doesn't create unnecessary legal problems for itself. Legal issues can arise from clients, suppliers, other outside parties, or company employees, and run the gamut in seriousness and complexity.

With that in mind, here are four ways to protect what the business already has by being smart about what it does.

Operate under a strict Code of Conduct

When employees work with other company employees or outside clients on a project, it’s important that they behave in an acceptable manner. Given that the people who make up a company’s workforce come from all walks of life and levels of experience, there are major variances on what each feel is acceptable behaviour and reasonable conduct.

By having a Code of Conduct document published and accessible to all employees – usually provided in the Employee Handbook – a set position is put forward for what standard of behaviour is acceptable and what is not. For instance, what is considered a beneficial relationship, a side benefit for services rendered, or another unethical action should be made clear in this type of document. Having it in place with employees who are accountable to it minimises the instances where unacceptable conduct occurs and makes it clear where the blame lies.

Familiarise yourself with applicable business laws

The laws applicable to business on a local, state and federal level must be adhered to. The SBA site is a good starting point to brush up on the basics. Every business is different and depending on the type of business you’re operating, there will be laws specific to it that must be understood and followed.

The main legal areas to focus on are:

  1. Intellectual property rights – Creative materials are protected under intellectual property law.
  2. Employment and labour law – The hiring process and human resources largely cover this area.
  3. Financial reporting – Laws about how the business is operated to protect the investors, the customers, and the business itself.
  4. Marketing and advertising – What a company is allowed to say and what they cannot say in advertising is important to understand to avoid running afoul of the law.

Be a student of employees’ behaviour

Consistency in behaviour is easy to see. There’s a pattern to most types of behaviour in the workplace. When things begin to happen that seem out of place, you should pay attention to that. When files go missing and cannot be found, certain people stay late or leave every day, or too many mistakes are happening, it’s up the management to realise there is a problem that needs addressing.

When things don’t seem quite right, that can also be a good indicator that some improper conduct is happening under your nose. Personal emails and calls home may confirm there are pressures at home. Anything that gets picked up as a potential red flag should be examined a little more closely to understand what is happening, why it’s occurring, and what can be done about it.

Protecting company intellectual property

Proprietary ideas and methodologies that the business relies upon must be protected. It is up to the company to ensure all employees sign a non-disclosure agreement (NDA) to prevent them from sharing important company secrets with outsiders during their employment and subsequent to it. An NDA lays down what should not be disclosed or discussed and the penalties for doing so.

Protecting a business is about avoiding minor issues and when they do occur, and taking care of them before they become larger problems. Sometimes business issues are avoidable, but in other cases protection is about having rules in place to make clear who’s at fault after the event. In either case, no business should function without having a good idea how to protect itself from legal issues.

About Boris Dzhingarov

Boris Dzhingarov graduated UNWE with a major in marketing. He is the CEO of ESBO ltd brand mentioning agency. He writes for several online sites such as,,, Boris is the founder of and

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