Top 10 Legal Missteps in Small Business: Essential Advice from Experienced Lawyers

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Starting ‍a small business is an exciting venture but also a complex process requiring a deep understanding ‌of New York State⁤ Law. At Morgan Legal Group, we’ve seen all the⁢ common pitfalls and legal missteps made by small businesses.⁤ To help ⁢you avoid these mistakes, we have compiled ‌a list of the top ‌ten blunders ‍to ‍avoid.

1. Not Structuring the Business Properly

When setting‍ up ⁤your business, it’s crucial to ⁢choose the right structure— be it⁤ a limited‌ liability, ⁤a corporation, or a sole‍ proprietorship. Your chosen structure will impact your tax obligations, personal ‌liability, and the required paperwork.

2. Ignoring Licensing and Permits

Every business‌ in New York requires some form ‌of license ⁤or permit. Failure to secure necessary permits can ⁢lead‍ to hefty fines and, in ​extreme cases, closure of the business.

3.⁣ Failing to Set Clear Contracts

Contracts ​are crucial for setting clear expectations between the parties⁢ involved. Failing to create robust contracts⁢ may⁢ lead to misunderstandings or‌ legal ​disputes ⁤in the future.

4. Not⁤ Protecting ⁣Intellectual Property

If your business⁤ creates a‌ unique product ‌or service, ⁢protecting ‌your intellectual property ⁣rights is an absolute must. ‍Failing to register your copyrights, patents, or trademarks ⁢can ‍expose you to financial loss and competition.

5. Neglecting Employee Laws

Not understanding the labor laws in New York can lead to⁤ expensive ⁣lawsuits. Ensure you’re compliant with all relevant ​laws ‍regarding minimum ⁢wage, overtime, anti-discrimination,⁣ etc.

6. ‍Misclassifying Employees

Misclassifying⁤ employees as independent contractors can lead to legal trouble​ and ‌fines. Be sure of the distinction between ​the two, and classify your ‌workers correctly.

7. Not ⁣Having‍ an‍ Exit ‍Strategy

Every smart business owner should have an ⁤exit ⁣strategy that ⁤is mindful of business continuity and possible tax implications.

8. ‍Failing to Retain Legal Counsel

Many‍ small business owners‍ try to avoid‍ attorney fees by handling⁢ legal matters themselves. This is often a false economy, as a good lawyer can ⁤prevent costly legal problems down the ​line.

9. Not Keeping Up with⁢ Tax Laws

Maintaining compliance with federal, state, and local tax⁢ laws is critical. Ignorance​ of‌ the law is not a viable defense‍ in the event of an audit⁤ or ‌liability concern.

10. Ignoring Privacy Laws

In the digital age, data privacy laws are more ‍important than ever.​ Understand and comply ‌with laws regarding the ⁤collection, storage, and sharing of personal data.


Avoiding these‍ common legal missteps may mean the difference between success and failure ⁣for your small business. Therefore, obtaining sound⁣ legal advice⁢ is crucial. At⁢ Morgan Legal ⁢Group, we provide expert legal services tailored to your small business needs. With our guidance, you can confidently navigate New York State ‍law, ‌freeing you to‌ focus on growing⁤ your ⁤business.

DISCLAIMER: The information provided in this blog is for informational purposes only and should not be considered legal advice. The content of this blog may not reflect the most current legal developments. No attorney-client relationship is formed by reading this blog or contacting Morgan Legal Group PLLP.

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