7 Legal Problems Service Businesses Often Face

In doing business, you will face many obstacles. These hurdles aren’t just about selling, avoiding losses, and difficult clients. You can also intersect with legal channels. The bigger your business, the greater the effort that comes to swing your business. The following are some of the legal problems that you as a service businessman will be at risk for. Anything?


Do not have legality

Many small service businesses do not yet have a clear legal entity. Some of them also lack an understanding of the legal and licensing aspects, including the requirements that need to be met, as well as the procedures to be followed to complete the process.
If you are really starting out, maybe your business doesn’t need this yet. However, when it starts running, your business needs assistance from legal advisors.

Failure to Return Loans

One legal obstacle often faced by small entrepreneurs is borrowing money from a bank / cooperative for capital, but after that the entrepreneur fails to repay the loan. If you have been unable to repay the loan several times, the borrower will forcibly summon the loan applicant, even bringing this problem to legal channels. Does failure to pay debt for business capital lead to imprisonment? The answer depends.
If you fail to pay your debt, it is not necessarily a criminal sentence. Failure to return a loan is included in civil law, so you are not penalized if this violation occurs. Meaning? You will not go to prison if you don’t pay your debt.

Except for the money you borrow which is supposed to be for business capital, you actually use it for kitchen needs. Which means, if the money is used outside of the agreed agreement (in this case it is used other than for business capital), you could be subject to criminal fraud or embezzlement.

But if the money from the beginning is used only for business capital, and not used for personal needs, then you are only subject to civil law. Although defaulting on a loan cannot be criminalized, of course you want to have a business that is clean from the touch of the hands of the law.
To anticipate this, you must completely separate borrowed money from personal accounts. Don’t mix your loan money for needs outside the agreement. If necessary, keep all receipts related to purchases for your business, so that you have proof that one day you are unable to pay debts.
In addition, make an agreement in advance with the borrower, what your loan money will be used for. So that when you can’t pay your debt, you are still in the realm of civil law.

Tripping over Discrimination / Harassment Cases

Indonesia consists of various races and religions. However, nowadays there are frequent conflicts related to differences in race, political views and religion. If your business stumbles on this issue, the repercussions are no joke. Especially now that the issue of SARA is increasingly sensitive and it is easy to spread on social networks. You certainly don’t want your reputation or your business to be affected, especially if this discrimination issue is brought to justice. How to deal with it? First, make sure you have legal counsel.

If your business doesn’t currently have a legal advisor, you can look for it on Halojasa. To prevent discrimination conflicts from occurring within your business, during the hiring process ensure that you accept applicants who are free from allegations or a track record of discrimination. Also make sure you select these employees not on the basis of race or religion, to prove that you are hiring the most qualified individuals, regardless of gender, ethnicity or age. Routinely monitor the relationships among employees in your business. Make sure that there is no discrimination between them, and make sure they make an interpersonal decision without getting involved in racial issues.

Harassment – whether sexual, racial or otherwise – can be a serious problem in workplaces of all ethnicities and religions. Regular meetings and communications with employees will allow you to prevent these violations, stop them before they spread to all other employees. Victims of harassment and discrimination tend to attract the attention of the media and netizens. In the end, this can hurt the branding of your business, as well as drain your legal budget.

Do not have a business license

Many service businesses ignore the importance of having a business license. In fact, a business license is a legal force that makes your brand or service more trusted. Some business people think that getting a business license is just a hassle and will cost money. In fact, the actual business license is not charged any fees, aka free. Maybe for a business that is really just starting, it doesn’t matter if you don’t have a business license yet. But it’s a different story if your business starts to grow uphill. You can use a business license as one of the conditions for borrowing money from a bank or cooperative as additional capital. Moreover, if one day your business already has a permanent location.

Copyright and Patent Issues

Service companies, especially those in the technology industry, often face aggressive patent litigation. You could be accused of impersonation or plagiarism. Some violations of this kind are intentional, some are not. Even when you feel like you’re not breaking, you need to be alert.
Currently, there are also many unscrupulous parties who seek money by harboring patents. They put a patent on hold for years. in the hope that other companies accidentally infringe a tiny fraction of their patents, and then make easy money through patent and copyright lawsuits.
At the stage of developing various services, branding, and your business name, make sure you thoroughly research existing patents and copyrights. As much as possible avoid the hassle of fighting at the legal table by accidentally stepping on a competitor’s tail.

Unsatisfied customer

Dissatisfied customers can file criminal lawsuits against your business, in which they gather in a large crowd of customers and attack your business for faulty service or promises. If enough customers are dissatisfied, a lawsuit can damage both you and your company to an irreparable degree.

In this case, be proactive and maintain your customer communication through technical support, online bulletin boards and e-mail. Listen to your client’s complaints, and try to provide the best solution to resolve these clients.

Other Legal Matters

Some of these things are legal cases that service businesses often face. We haven’t mentioned tax litigation as well as legal conflicts with competitors which can vary. But the point is to make sure you are always active in preventing possible violations of the law.