Starting a new construction business has a few risks that are not often discussed. You should be aware of the legal risks of owning a construction company. Here are some legal issues you may face as a new company owner.

1. Regulatory Issues

Setting up a business requires you to comply with local licensing requirements. Each locality has different requirements. In some areas, you don’t need to be licensed to do your job, but you do have to register your business with state tax offices and more.

A misstep in this area can cost you. A lawyer who specializes in setting up businesses could be a great help. According to Clio, about 1.3 million lawyers are in the United States. There is a lawyer who can help you set up your business and avoid some of the potential legal issues.

2. Contractual Agreements

Contract disputes are a common occurrence in the construction industry. There are ways you can avoid these types of legal issues. The first and most important thing is to ensure that your service contracts are clear and concise. Unclear contracts will leave you open to legal issues.

Designing your contracts with the help of an attorney will ensure you and your interests are protected. An attorney should view all of your contracts, including HR contracts; according to IBIS World, about 253,000 people are employed as roofers. Roofing is one of the most dangerous activities in construction. Ensuring legal protection starts with having legal instruments in place that are designed to protect your business.

3. Safety Issues

Even small construction company owners are bound by safety and compliance rules if they have employees. Educating yourself about safety rules is essential as an owner. In some states, you must provide personal protective equipment for your employees. An attorney can help you to understand your responsibilities better.

There are insurance requirements directly related to your employees’ safety that you will also need to comply with. Safety and compliance issues are among the most common issues new owners must face. In most cases, these issues occur because the owner was unaware of the regulations. Ignorance of the law is never an excuse for not following the law.

4. Non-Compete Violations

If you worked for a construction company before starting your own company, you may want to check the documents you signed when you were hired. Let’s say you opened a fence company after working for another fence company. According to IBIS World, there are 312,560 companies around the globe.

You may encounter legal issues if you signed a ‘non-compete’ when you were hired and that document is still in effect. Depending on the wording in the non-compete document, you may face heavy fines and penalties and may have to close down your company. Before you take your next step, review any old documents you have from an old employer.

5. Building Permits

Small construction companies often have legal issues because they did not secure the necessary permits to build or renovate. A good rule of thumb to avoid legal issues is always researching before starting a project. Permit issues can get very expensive.

A building inspector can shut down a project. They can even make you rip out the work you already did at great cost to your wallet and reputation. It is best to err on the side of caution when it comes to permits and always check to see if one is necessary before you start the project.

There are a lot of potential legal issues a new construction company can face. Getting the right support will reduce the risk significantly. Contact a lawyer who can help with everything from setting up your business to ensuring your business remains compliant with all the laws. Call today.


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