A number of entrepreneurs realize that they face fines for breaking local business laws. These laws can differ depending on the city or even the street it is located on. What a number of entrepreneurs do not realize is that they could face criminal charges if found negligent in a number of areas. An entrepreneur has to be careful with the people that he surrounds himself with at the top of the company. These individuals can do the most damage if they are malicious or just not knowledgeable about laws/policies. The following are criminal risks that an entrepreneur faces when starting a business. 

Correctly Filing Taxes

The last thing that any business owner wants is to get involved with the IRS in a negative manner. Incorrectly filing taxes could be seen as tax evasion especially if the owner is keeping personal funds illegally in company accounts. Hiding income is quite common and can lead to a number of issues. There are a number of tax breaks but you will likely have to invest in a CPA to assist with this. The IRS is not an entity that will make very many mistakes so keep this in mind during tax season. 

Personal Spending of Investor Money 

There are so many stories of how investor money has been spent unwisely. This is not illegal although it can put an entrepreneur on an investor blacklist in a particular industry. You do not want to have to get a federal crime attorney due to breaking laws across state lines. Setting up meticulous systems to track the spending of the company is important. These might seem tedious at first but will be a lifesaver during tax season.


Fraud could be misrepresenting services or products. Products that are supposed to be sourced from one country but are knowingly purchased from another is a perfect example of fraud. There are some entrepreneurs that try to take shortcuts when it comes to product parts. There are certain countries that are not known for quality products but are far cheaper than buying them domestically. Fraud takes so many forms that it is important to be transparent with investors, employees, and management. 

Civil Issues Are Still A Huge Risk 

Criminal issues can be eliminated by simply having a compliance professional on your team. There are still going to be issues with terminated employees no matter how generous you have been in the past. Discrimination could be claimed and this is why it is important to document everything throughout all the employment of an individual. HR professionals can be a huge help as they understand what needs to be done to protect the company legally. Getting the right business insurance is important as the last thing you want is an accident to lead to the business closing. 

Criminal risks when you are an entrepreneur do exist whether you are using your own money to fund the business or not. Restrictions on businesses could increase so make sure you stay updated with all of this information going forward.