Legal mistakes in a business environment are defined as law-related issues and proceedings that the owner of a business must consider in order to run the business seamlessly. There are certain legal standards that you need to uphold as a business owner which is all clearly outlined by governmental laws otherwise, issues will arise when not in compliance with such laws and it does have a negative effect on your business’s reputation. Therefore, it’s imperative that you ensure that your business is all above board and that you take all legal understanding seriously. The more you know about the common legal issues that businesses face, the more you can do to avoid them and prepare yourself against them. Legal disputes can be time-consuming and costly, especially for small business owners who may not have the funds for adequate legal representation. While the legal issues that you’re most likely to face will depend on what industry you’re in, these are some of the most common legal mistakes facing the majority of businesses: 1 Not Having a lawyer If you want to prevent legal issues and prioritize being a legally sound company, your best bet would be to seek the advice and guidance of an official legal services provider.  Employing the services of a lawyer aids to identify legal issues that are common and peculiar to the business. The legal advisory can help position the business to take advantage of opportunities that may enhance growth in the long run. It also eliminates any future risk which may threaten the life span of the business. However, in employing the services of a lawyer, small business owners should seek legal advice from lawyers who have expertise in business growth and development. Lawyers who have no expertise in business advisory will fail to recognize the vital issues that are important to the business. 2. Get the Right Business Structure  The type of business structure you decide on for your startup impacts your funding opportunities, tax responsibilities, and personal liability. Although you can change the business structure as the startup develops, setting it up appropriately from the beginning based on the business type and your future goals will give your startup a strong foundation.  The right business structure also helps for effective organization and management structure. Additionally, the right business structure can help the business take advantage of the incentives put in place by legislation to support business growth. not having the right business structure can be a legal mistake that will hinder growth and expose the small business owners to the personal liability of the business. 3. Not Registering Your Business This is another common legal mistake. Entrepreneurs often underestimate the need to register the business entity early. Business entities are capable of owning properties, entering into legal agreements, and having debts obligations. Thus, there is a need to separate the identity of the business entity from the business owners. This is achieved by registering the business structure under the law. Hence, separate the business liability from that of the small business owner.  Ensure that you decide whether registering as a sole trader, a partnership, or a limited company, suits your business ideals and objectives best, and register accordingly. Each structure has different legal implications, so make sure that you understand them fully well with the help of a legal advisor. 4. Not Having Founders/Shareholders Agreement Starting a business with a family member or friend may seem like a good idea, but it could also become a costly legal mistake as the business grows. Because of the familiarity, there are many instances in which an official shareholders’ agreement (which states the objectives, official shares, as well as the rights and responsibilities of each shareholder) and a Founders Agreement sets out the founders’ roles, responsibilities, liabilities, salary, shares in the company (equity), restrictions placed on their ability to work elsewhere and dispute resolution mechanism are often just never created, and when misunderstandings and disagreements arise, it can turn into a nasty legal battle. No matter whom you start a business with (if anyone), ensure an official shareholders’ and Founders Agreements is in place! These agreements help keep your personal and professional relationships intact. 5. No Protection Of Intellectual Property A common legal mistake that many new businesses make is not properly protecting their intellectual property. Intellectual property gives the business its identity and branding distinct from its competitors. This identity and branding can be easily lost to competitors if not protected. Therefore, businesses should at the early stage develop a strategy for its identification and protection. If you do not effectively employ the use of patents and trademarks, you may have to experience another business stealing your ideas and patenting them for themselves. Legal disputes over intellectual property can often be very complex and take years to resolve! Equip yourself with sufficient knowledge about intellectual property to avoid being dragged into a costly and lengthy legal battle. 6. Bad Issuance of Equity In the formation of a company, the equity created is often used as compensation to the founders, investors, and early-stage employees. However, companies make the legal mistake of failing to vest equity before issuance as compensatory benefits. Vesting of equity means the issuance of equity to a founder or investor or employee, but the rights to such equity are given over a period of time. Vesting is used as a form of incentive to ensure commitment to the company. It gives the prospective equity holder an opportunity to create value for the equity. Unwise issuance of equity without vesting gives room for founders, employees, and investors to pull out of the company without creating value for the equity. Thus, it diminishes the value of equity and that of the company. Therefore, hindering the company’s growth and risking business failure. Companies, especially startups are advised to have a vesting clause or agreement when issuing equity to founders, employees, and investors. 7. Uncertain Terms of Service This legal mistake often occurs at the early stage of