Legal Issues Faced By Software Companies: Why Legal Assistance Is Necessary

By  Maham Qasim

February 03, 2022 11:54 pm EST

The scope of software in today’s world is massive. Hence, there is an ever-increasing demand for quality software applications to cater to the needs of people from various segments such as education, entertainment, business etc.

With the advancement in technology, high-performance computers with high storage capacity coupled with enhanced connectivity are becoming more and more affordable. This has given a fillip to the software industry, and there is an increasing trend of people setting up their own software companies.

However, running a software company isn’t easy. Several legal issues need to be taken into account. This article will look at some of the most important legal matters that software companies need to know.

Intellectual Property Rights:

One of the most critical legal issues that software companies need to know is intellectual property rights. To protect their intellectual property, software companies need to register their trademarks and copyrights with the appropriate authorities.


A software company needs to have a proper understanding of licensing. Several licenses need to be taken into account while developing software for different types of users. For example, the educational community uses the Educational Community License (ECL) while businesses use either the General Public License (GPL v3) or the Business Source License (BSL).

Contractual Issues:

Software companies need to be aware of the various contractual issues that can crop up while doing business with other companies. For example, there could be issues regarding the payment terms, delivery of goods and services, warranties etc.

Employment Issues:

Running a software company is tough because of all the required resources to get the work done. One solution would be to hire full-time employees to run the business’s day-to-day affairs. However, employing full-timers can give rise to serious employment issues such as – employee rights and obligations, termination of employment, benefits etc.

Privacy and Data Protection:

Privacy and protection of data have become critical problems with the advent of big data and the internet of things. Software companies need to be aware of these issues and take steps to protect their customers’ privacy and the data they collect.

Licensing of Software:

Not all software can be distributed for free. The software company’s license needs to be checked when distributing non-free software to ensure compliance with local laws and regulations.

Getting Help From Experts:

Running a business involves taking risks, solving problems and sticking to a detailed plan. However, running a software business can be tricky as some complex legal issues need to be addressed. In such cases, it is recommended that software companies hire an experienced lawyer or consultant who can guide them through these complex legal minefields.

No matter how well you plan, something is bound to go wrong sooner or later. A good lawyer can help you resolve the issue quickly and cost-effectively. In addition, having a good lawyer on your side will give you the peace of mind that you need to focus on running your business.

So, if you are a software company, it is essential to be aware of the various legal issues that can crop up while doing business. You can protect yourself and your business from potential legal problems by taking appropriate steps.

Maham Qasim

Maham is a copywriter and content creator who's always been drawn to the idea that there's more than one way of getting things done. Her writing career can be thought of as just another side hustle for her; when she isn't crafting content or reading Oscar Wilde, Maham often strategizes about how best to reach out with an engaging voice in this ever changing marketplace!

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