As a Texas small business owner, you need to address many legal concerns that pose significant obstacles and prevent your business from running smoothly. Our Houston business law attorneys at Feldman & Feldman, PC want to ensure you are familiar with 11 common business legal issues facing small businesses in Texas. Being aware of these can help you protect your company by ensuring you adhere to all the necessary aspects of opening and running a small business.
Legal Issue 1: Corporate Structure
It is important to select the proper entity type for your small business. The business structure you choose will determine how your business is operated and how income and liability are distributed. There are several common business structures you will need to choose from as a small business owner, including the following:
- Sole proprietorship
- General partnership
- Limited partnership
- Limited liability partnership (LLP)
- Corporation
- Limited liability corporation (LLC)
It is important you select the entity type that is best for your small business, as your personal liability will differ with each. Each business structure type has different filing and organizational requirements, and if you do not properly obey them, you can face serious legal issues and liability. As such, it is in your best interest to consult with a business law attorney in Houston to discuss the specifics of each corporate structure and which is best for you.
Legal Issue 2: Zoning Laws
Specific areas in Texas may have zoning laws and regulations you are required to follow when opening your small business. For example, while Houston does not have a formal zoning ordinance, it does have certain restrictions depending on deed constraints. A Houston business law lawyer can help you ensure that your small business conforms to local zoning requirements to avoid fines, litigation, and other penalties.
Legal Issue 3: Licenses
It is essential that you obtain all the proper business licenses necessary to operate your Texas small business. If your business is regulated by a federal agency, you must obtain the appropriate corresponding federal license or licenses. You must also register your company with the Texas Secretary of State and may need to obtain a state license and / or permit and a license from your specific county or city as well.
It is important to know which of these expire and must be renewed. Failure to maintain the proper licenses can result in fines, lawsuits, or even forced business closure.
Meet with a Texas business lawyer to be sure you obtain and retain all the licenses needed to keep your business compliant.
Legal Issue 4: Tax Laws
If you do not follow the proper tax laws and considerations required under your corporate structure, you will almost certainly face significant legal challenges. It is essential that you have an experienced business attorney to help you comply with all state and federal tax laws that apply to your small business. If you fail to file and pay the necessary taxes for your Texas small business, you can be faced with penalties, interest, tax liens, revocation of your business license, seizure of your assets, and criminal charges.
Legal Issue 5: Insurance
As a small business owner in Texas, you may be required to obtain commercial general liability insurance to protect your business. You may also need product liability insurance, motor vehicle insurance, and insurance to cover your employees if they are injured at work. A reputable Houston business lawyer can review your requirements and options for obtaining liability insurance for your company to protect it from liability exposure.
Legal Issue 6: Securities Law
If your small business obtains funds from capital investors or sells securities to the public, it is critical to comply with securities laws. These laws require you to register your business with the U.S. Securities and Exchange Commission (SEC) and file appropriate disclosures and documentation regarding the sale of securities. Securities laws can be complex, and a business attorney can help ensure you avoid fines or imprisonment for violating these regulations.
Legal Issue 7: Intellectual Property
As a small business owner, you must be sure that your business name, slogan, branding models, and other characteristics do not infringe on another party’s trademarked property. Such violations can leave you liable to trademark infringement lawsuits. This is why it is important to thoroughly research the intellectual property of others and to register your own business’s intellectual property.
Legal Issue 8: Contracts
It is important to have detailed, written contracts regarding the roles and obligations of each owner and for your business’s governance procedure, employment contracts, and real estate agreements., among others You should avoid vague and ambiguous contracts from an internet site, as they can leave you open to damaging legal ramifications. It’s crucial to work with a law firm that is familiar with state and federal laws to review, negotiate, and draft enforceable contracts.
Legal Issue 9: Recordkeeping
If your small business has employees, you are required to keep certain types of records readily available for inspection for a specific time period. Keeping proper and accurate corporate records is important in minimizing potential legal issues. Without such records, you can face a number of legal problems, including liability, contract disputes, and payroll inconsistencies.
Legal Issue 10: Employees
There are a number of employment-related legal issues that a small business owner in Texas can face. Feldman & Feldman, PC’s employment lawyers can provide you with legal guidance regarding the many issues you could encounter. Common legal issues regarding your employees often include the following:
- Civil rights issues
- Defamation
- Discrimination and harassment
- Drug testing
- EEOC requirements
- Employee policies and procedures
- Employment agreements
- Hiring, firing, and discipline
- Immigration laws
- Layoffs
- Leave laws
- OSHA regulations
- Overtime and wage and hour laws
- Privacy laws
- Restrictive covenants
- Retaliation
- Standard operating procedures
- Wages and benefits
- Whistleblower actions
- Worker classification
Texas laws regarding employment issues can be complicated, as they cover a multitude of situations. If not understood or followed properly, a small business owner can face unnecessary expenses, legal problems, and a myriad of other concerns. Consult with a skilled Houston employment attorney to protect your small business from potential legal troubles.
Legal Issue 11: Business Partners
Legal issues can also arise between small business partners. Disputes between partners can cause each partner risks and potential personal liability that puts their assets in jeopardy. Contact a Houston business partnership dispute attorney at Feldman & Feldman, PC if you need help resolving a complex partnership dispute, such as one of the following:
- Allegations of criminal activity
- Breach of fiduciary duty
- Disagreements on how to conduct or run the business
- Employment or partnership agreement breaches
- Failing to uphold partnership obligations
- Fraud or misappropriation of business assets
- Internal investigations
- Self-dealing
Disputes between your small business’s partners can be emotional and contentious. Worse, they can lead to legal problems and litigation that can quickly become costly for everyone involved.
Keep your Texas small business protected from legal issues with help from a Houston business partnership lawyer.
Retain a Houston Business Law Attorney to Help with Your Small Business Legal Issues
Business legal issues can cost your Texas small business thousands of dollars and potential legal ramifications. We can help you understand what is required of you as a small business owner to protect your rights and assets and can help you resolve legal issues that have already emerged.
Contact our business law attorneys at Feldman & Feldman, PC today.