In order to be successful, entrepreneurs must juggle thinking about their business’s future while simultaneously worrying about the day-to-day legal issues of running the company.
In this fast-paced economy, skipping early legal steps can be a costly mistake. This article discusses several legal mistakes small businesses make that can be easily avoided.
Avoid failing to set up the correct business structure.
There are a few different business structures to choose from, such as LLCs, sole proprietorships, S-Corporations, corporations and partnerships. Unless you’re deeply familiar with each type of structure it is recommended that you seek guidance from an experienced attorney to assist with determining which is the best for your business structure for you. Choosing the wrong structure could leave you or your assets open to risk or it could be costly in taxes.
Avoid letting your hard-earned business ideas get stolen.
Don’t hire a general attorney when you need a specialized attorney. Protect your intellectual property and trade secrets by hiring an attorney with the right knowledge. Hiring a general practitioner when you need a patent attorney could cost a business owner not only time and money, but lost business opportunity.
Avoid ignoring or dismissing employee harassment complaints.
Take every employee complaint of harassment, sexual harassment and discrimination seriously. Ignoring or dismissing complaints can lead to costly litigation cases. Work with an attorney to develop a no tolerance policy that addresses the steps you’ll take when a harassment complaint arises.
Avoid working outside of the law.
Give yourself more time and a larger budget than you think you will need. You don’t have to try to get the entire business up and running all at once. Start with obtaining the some of the licensing you need to start work on a particular part of the business while your attorney works on setting up the rest of your business. Keep a bigger budget than you think you need so that unexpected delays and fees do not cause you to want to work outside of the law and skip crucial legal steps.
Avoid using cookie cutter contracts.
Anyone can find generic contracts online and think they’re sufficient, but unless an attorney has adjusted it to fit your needs, it may not hold up in a court of law. Don’t skimp on creating air-tight contracts for your business. Contracts are used in all aspects of a business from employee agreements, to vender contracts, to business partnership agreements. Additionally, don’t sign any contracts prior to having your personal attorney review them to ensure that they protect your interests.
For more information about common legal issues many small businesses face, send us a message.
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