If you own your own small business chances are you know very little about the laws and regulations that you encounter on a day to day basis. Understanding the legal issues that concerns small businesses it is vital to your business success. The small business association suggests that all small business owners take a few legal courses to understand the legal issues you may come up against. However many small businesses ignore this advice and suffer consequences that could have been avoided.

In todays world of technology, several resources offer up-to-date material on business procedures that directly affect the legitimacy of a company. The following are a list of common mistakes and how-to avoid repeating them.

For most business transactions you want to create and sign a contract. Contracts or service agreements allows you to define what your services or products entail. Service agreements are an important way that you can protect yourself and your business. Dont overlook this important aspect of small businesses.

In each service agreement you should list in detail what your service encompasses. Be very specific and dont leave anything out. A signed contract is a very important legal document and can stand up in court. Also be sure to add what is considered an extra service and what the charges would be. Make sure that you dont leave anything out of your service agreement.

As a small business you may or may not have several employees working for you. The termination of an employee is a touchy subject but may be necessary at some point in time. You should be clear on employee termination laws and regulations.

Sometimes employees will threaten with Unlawful Discharge suits. It is important that each member knows they are an at will employee, which means they can be terminated at any time, or for any legitimate reason.

If you need some additional help many small businesses choose to hire independent contractors. Hiring independent contractors can seem like a simple choice since youre not responsible for reporting their earnings to the IRS.

Even though you may have hired an independent contractor the IRS may consider their job to be that of an employees. This means things could get complicated for you. Be sure to check what the IRS considers employees jobs before hiring an independent contractor.

When starting your business you need to know how your business is classified. You may be a sole proprietor or perhaps in a partnership. Each of these designations carries its own legal ramifications. For instance as a sole proprietor you are vulnerable to legal action taken against your company.

A better choice would be to start your company as a limited liability corporation. This means your company is a separate entity that must deal with its own legal issues and you are not personally held liable.

Intellectual Property Issues Even low-tech companies have intellectual proper issues that directly affect the long-term success of the business. Pay close attention to confidentiality and invention assignment agreements, registered trademarks, and copyright notices. Protect the companys trade secrets adequately.

If you dont want problems with the IRS, good record keeping and accounting is essential. You can cause serious problems for yourself and your company if you dont keep records of all business transactions.

If you cant afford to hire an accountant there are many bookkeeping software packages that can make things easier on you. Be sure to keep all of your paper documents as well since they may be necessary should you be audited.

Do your research and compare fees. The long term relationship you build with your corporate attorney will have its value. All businesses should make an investment in a good corporate attorney.

Without a doubt, a business should run erring on the side of caution. Choosing to operate without the proper knowledge on business laws and business ethics, will lead to disaster. Check with an attorney before pursuing a business and start on the right foot.