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3 key legal concepts to know as a business owner

As a business owner, it is critical that you understand the rules and regulations that govern proper business practices. Not doing so may lead to expensive fees and additional consequences.

Some companies are able to maintain an attorney or legal staff; however, this is not always the case, especially for smaller companies. Though business law is a broad field, it can be beneficial to stay abreast of certain concepts.

1. Break rules and overtime

If an individual works a 40-hour shift, the law requires that the employee receive a break. Though most employers are aware of this, they may not be familiar with the regulations for when the break must occur. Also, if an employee works more than 40 hours, overtime pay may be required by law. The Michigan Workforce Opportunity Wage Act details the minimum wage and overtime requirements for different individuals, as well as the penalties for breaking the law.

2. Vicarious liability

Employees are essential to the efficient function of many businesses; however, they also present a liability. Most employers recognize their responsibility for their employees while they are on location. But liability does not always stop there. If employees cause harm to themselves or others while off the property but on company business, the employer may still be liable.

3. Complete contracts

A verbal agreement may stand as a binding contract between two parties. However, when operating a business, it is important to have all contracts in writing and in proper form. Leaving out certain details or required information can make a contract invalid.  

These are just three of the key concepts that every business owner should be familiar with and make sure their company properly incorporates them into the right business practices. Along with staying abreast of the federal and state rules and regulations, it can also be beneficial to review current processes and contracts with a professional who is knowledgeable in business law.

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