Small businesses are left in a loom by the COVID-19 epidemic financially and in terms of the law. Many small businesses have had to close their doors temporarily or permanently. Why? All because of lockdowns and other measures put in place by the government.
A large number of small businesses have seen a drop in sales. It made it hard for them to pay their bills and keep up with costs. Because of COVID-19, small businesses have had to reach out to business lawyers to learn to meet many new rules and regulations.
To help small enterprises to revive after the epidemic, the government set up programs like the Paycheck Protection Program (PPP). Small businesses have also had to deal with new laws from the Occupational Safety and Health Administration (OSHA) about remote work and worker safety.
Small businesses also have to deal with more insurance, contract, and conflict problems. A few have had to renegotiate or cancel contracts because of the pandemic. Others have had to file insurance claims for damage caused by the COVID-19 virus.
Business Lawyers: The Legal Needs of Every Small Business
Covid-19 has altered the legal scenario and there are new laws and regulations in place. To keep their actions as per the law, SMEs need business lawyers. There is a legal need for every business more than ever.
This could mean following local, state, and federal regulations and guidelines and also, to avoid all restrictions set by organizations in the industry. Business lawyers can also help with contracts, employee rights, and liability.
To avoid legal infringement, business lawyers will help consider all the possible legal actions. Only those businesses would be able to thrive after this massive pandemic which will have their legal affairs up to the mark.
Small Business Law and COVID-19
Small business law and COVID-19 are closely connected. Some critical legal issues small businesses may face are discussed here.
- Compliance With Government Regulations and Guidelines: Small businesses must comply with government regulations and procedures related to the pandemic such as social distancing, mask-wearing, and capacity limits.
- Contracts and Force Majeure: They may need to review and potentially renegotiate contracts in light of the pandemic. Also, they will rely on force majeure clauses to excuse or modify performance.
- Employment Law: Small companies will need to comply with laws related to layoffs, furloughs, unemployment benefits, and remote work regulations.
- Insurance Coverage: To review their insurance policies, SMEs will need business lawyers. Determining if they are covered for losses related to the pandemic is crucial.
- Financial Assistance: Small businesses may be eligible for various forms of financial aid, such as small business loans and grants. They may need legal assistance with the application process.
Small Business and COVID-19 Tax Laws
Small businesses may be affected by various tax laws and regulations related to COVID-19. Some of the critical tax issues that small businesses may face include the following:
- Paycheck Protection Program (PPP) Loans: SMEs that received PPP loans may be eligible for loan forgiveness. They will need to consult a business lawyer to understand the tax implications of loan forgiveness.
- Sick and Family Leave Credits: SMEs that provide paid sick and family leave to employees may be eligible for a credit against their payroll taxes.
- Business Expense Deductions: SMEs may be able to deduct certain expenses related to the pandemic such as personal protective equipment (PPE) and sanitization costs.
- State and Local Taxes: They need to be aware of any changes to state and local tax laws related to the pandemic, such as changes to sales tax and property tax.
Small Business and COVID-19 Contract Laws
Small businesses may be affected by various contract laws related to COVID-19. Some vital contract issues that small businesses may face are listed here.
- The Frustration of Purpose: Small businesses may invoke the doctrine of frustration of sense. In case the pandemic has substantially altered the contract definition or made it impossible for one party to perform.
- Material Adverse Change: Small businesses may consider whether the pandemic has resulted in a material adverse change (MAC) for a contract. And whether that may be a basis for termination or renegotiation.
- Breach of Contract: Businesses must consider whether the pandemic resulted in a breach of contract. Whether by non-performance or non-compliance with the contract.
- Dispute Resolution: Small businesses may need to review the dispute resolution provisions in their contracts. Such as arbitration or mediation, to understand the process for resolving disputes that may arise due to the pandemic.
Small Business and COVID-19 Insurance Laws
Small businesses may be affected by various insurance laws related to COVID-19. Some key insurance issues that small businesses may face are given below.
- Business Interruption Insurance: Many small businesses may have business interruption insurance policies that will cover losses that result from a government-mandated shutdown or other pandemic-related disruptions. Small companies must consult a business lawyer to file a claim if necessary.
- Event Cancellation Insurance: Many small businesses may have event cancellation insurance policies. That will cover losses resulting from canceling events due to the pandemic. An insurance professional must understand the coverage and file a claim if necessary.
- Liability Insurance: Small businesses may need to ensure that their liability insurance policies cover losses resulting from the pandemic, such as employee or customer illness. There is a dire need to consult a business lawyer to understand their coverage.
- Workers’ Compensation Insurance: Small businesses may need to ensure that their workers’ compensation insurance policies cover losses that result from employee illness or injury related to the pandemic. Small companies must review their policies and consult an insurance professional to understand their coverage. You may check this article about How to get business insurance in Ontario to know more about business insurance and why it’s necessary.
The Covid-19 lockdown has been revoked. Yet, the concerns of owners of small businesses have not become less. There are bundles of legal and financial issues ahead. To get all these problems sorted out, legal knowledge is a must.
Business lawyers in such situations can prove practically helpful. They can help regarding all issues from paychecks to Insurance. To avoid any more loss in terms of sales and reputations, business lawyers are the most significant need of the hour for SMEs.