Small business owners have a lot to consider, from making sure that customers are happy to keeping everything legal. With so many laws that apply to small business owners, it's easy to lose sight of specifics and find yourself facing legal issues. Here are a few common mistakes that land small business owners in legal trouble.

Using One-Size-Fits-All Contracts

There are many legal resources available online with sample contracts, legal forms and other documents. These sources make it easy for an entrepreneur on a budget to find the documents necessary at an affordable rate. The downside to this type of contract access is that the paperwork comes without the legal consultation and support of an attorney.

Some of these contracts and documents may not be considered enforceable in court, or they may be missing vital information to protect your company. The best way to ensure that your contracts are comprehensive, enforceable and appropriate for your company is to work with a business attorney to personalize contracts for each supplier or client.

Mistaking Employees for Contractors

Employees are more costly to a business than independent contractors, primarily because of the overhead associated with them, such as benefits, resources and work space. Some small business owners mistakenly believe that opting for independent contractors instead is a great way to save on those costs.

The federal government places strict regulations on independent contractors as compared to employees, and hiring a contractor that you then treat as an employee can be costly. The Internal Revenue Service states that you can only declare someone a contractor if you have no control over when and how they complete their job.

There are other detailed requirements as well, including the frequency of payments, the timeframe of your working relationship and more. The best way to ensure that you're classifying individuals properly is by talking with a business law attorney about the job requirements and expectations of your employees.

Sacrificing Equity and Ownership Rights

In the early days of establishing a business, some small business owners make a seemingly small, but ultimately costly, mistake. In an effort to get the services that they need, many entrepreneurs opt to trade equity shares in the business for services to help get things going. For example, a small business owner who needs marketing help may trade equity in the company for a solid marketing campaign. Unfortunately, this can cost a significant amount in the long run, particularly if the business grows to be highly successful.

If you are interested in trading equity for services as you're starting up, the best thing you can do is retain the services of a business attorney who can help you draft a contract that sets limitations on how much equity each service provider is entitled to. These limitations can help you avoid a situation where a vendor who supplies $2,500 worth of services is earning tens of thousands of dollars in equity over time. Your attorney can create contracts that you have to sign with each supplier that specifies an earning cap so that each vendor is receiving only the equity that pays for the services, and potentially a bonus amount as a sign of appreciation for taking the long-term payment path.

Launching a small business is an exciting time, but it's a legally tumultuous one. From employee decisions to vendor agreements, mistakes can be costly. Protecting yourself and your business requires dedication, time investment and an understanding of the legal limitations. Work with a small business attorney to help you figure out the legal implications of your decisions to ensure that you're making the choices that are best for your business and your long-term legal stability. For more information on how a business attorney can help you, you can pop over to this website.