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You need to be familiar with legal issues faced by startups if you’d like to avoid them in the future. There are some mistakes which business startups make and they end up costing them a lot in the future. You should consult a qualified business lawyer so that you will draft the right contract before you begin. You will end up losing a lot of money later if you will ignore and proceed.
Employees have a lot of rights in their unions and against wrongful termination. If you will have to terminate an underperforming employee, then you should ensure the employee signs a form which will put his or her reason for termination crystal clear. If you will make a mistake of letting an employ go without clear reason, you will stand a risk of legal action against wrongful termination. Hire qualified attorney to draft for you the form to be filled by the employee before termination.
You should avoid cases where your company will be perceived to be biased. Receive all applicants and subject them fair interviews which will make you hire the most qualified. This is necessary because any confusion can portray your company as biased which will hurt the reputation of the company. Remember most racial, gender and other forms of discrimination in workplace tend to attract a lot of media attention which can hurt the reputation of your company.
You need to carry out background checks and ensure all employees are legally allowed to work in the country. There are illegal immigrants who can come in the country with falsified documents. If you are found using illegal labor, the surprise audits which will be carried by government will render your company out of service.
There are some companies which will register patent and sit on them waiting for other companies to infringe on them so that they will use and get quick cash. To avoid falling a victim, in the product development stage of your company, you should carry out enough background research and know any patents or copyrights which may exist.
Dissatisfied customers will contribute towards legal issues faced by startups. Customers who will not be satisfied can decide to file class action lawsuits against your company. They can gather in large groups and sue your company over faulty products or services. The class action can easily tarnish your brand and do more harm to your company. Be prompt to address customer issues for you to avoid more damage to your company.
Disclaimer: This article is intended to provide a general summary of laws in the State of California and should not be construed as a legal opinion nor a complete legal analysis of the subject matter. Noelle Minto is an attorney at NM Law, APC in Tustin, California, a law firm specializing in Trusts & Estates and Business Transactions.