Starting a new business is as exciting as it is demanding. With so many details to consider, it is not uncommon for eager entrepreneurs to overlook certain legalities that could potentially get them into major hot water. In these cases, even the most well-intentioned business owners could be breaking the law without even knowing it, putting themselves at risk of litigation, loss of business license, or even criminal charges.

When considering starting a business, it is extremely important to protect yourself and your business from legal troubles that could end up costing time, money, or your freedom. Seek the advice and counsel of an experienced and reputable business lawyer who can help you avoid these and other legal missteps.

Following are some common mistakes entrepreneurs can make:

1. Failing to obtain all necessary state permits and licenses. Requirements can vary depending on the type of business, the location of headquarters and operations, and what government rules apply.
2. Failure to make payroll tax deductions. Employers who fail to withhold federal income taxes and turn them over to the federal government are playing a dangerous game.
3. Deducting personal expenses as business expenses. Determining what expenses are considered business and what are personal can be tricky, especially because many expenses are useful for both purposes.
4. Misclassifying employees as independent contractors. Misclassification can lead to a myriad of legal problems down the road, including discrimination, wage and hour disputes, Workers’ Compensation, unemployment, and employee benefits.
5. Classifying all employees as exempt, whether they are or are not. Both federal and state laws rely on a variety of criteria to determine whether an employee is exempt – salary is not the only factor.
6. Failing to comply with federal and state wage and hour statutes. State laws may vary, so it is wise to keep yourself informed on statutes that apply to employee overtime and rest and meal breaks.
7. Failing to implement appropriate workplace policies. Policies regarding discrimination and harassment should be prepared and communicated to employees in order to protect the company against an employee claim. Although many federal discrimination laws apply only to companies with 15 or more employees, there may be state discrimination or harassment laws applicable to companies with as few as four employees.
8. Improper use of investor funds. Spending money given to you by people in trust could be jeopardizing your investor relations at best, or result in being faced with charges of embezzlement at worst.
9. Selling recalled or counterfeit products. Both are illegal, whether you knew what you were selling was recalled or counterfeit or not.
10. Not charging, reporting, or collecting sales tax. A business attorney can help to ensure that all state and local sales taxes are charged properly.

Philadelphia Business Law Firm of Sidkoff, Pincus & Green Provide Sound Legal Counsel for Businesses

Business law can be difficult and complex. There are rules; there are exceptions to the rules; and then there are exceptions to the exceptions. Philadelphia business lawyers at Sidkoff, Pincus & Green have the knowledge and the experience to help your growing business succeed. We offer a wide range of business services ranging from contract law, employment law, trademark litigation and governmental over-reaching. We have the strategies to help you avoid litigation, and the knowledge and skills to protect you when litigation is necessary. Call us today at 215-574-0600 or contact us online to learn how we can help you protect your business.