If you're a business owner or thinking of starting a business, you may be worried about the risk involved. This article discusses 5 ways business owners can protect themselves.
Business owners can protect themselves in very simple, but sometimes time-consuming ways. Doing things the right way from the beginning, however, will ultimately save a business owner not only time, but money and peace of mind, in the long run.
Consider these 5 ways business owners can protect themselves:
Protect yourself as a business owner and form a LLC or a corporation.
Don't expose yourself to the liabilities that come with running a business. Speak to an attorney about changing your business to an LLC or a corporation. Depending on the state your business is located in, there are many different types of business structures to consider. Avoid the liability of a sole proprietorship. Sole proprietorships can put your name at your personal assets at risk.
Draft formal business contracts.
Use an attorney to draft legally enforceable written contracts between owners, employers and employees, clients, and venders. These contracts will make duties and obligations more clear and they will protect you from liability.
Depending on your type of business you may want to have additional agreements.
If your business depends on your employees and owners keeping trade secrets, you may want to consider drafting up non-disclosure agreements and non-competition agreements. Consult with an attorney who understands the laws of the state where the business is located to ensure that these agreements will be reasonable and enforceable. Without these agreements in place, you may expose the business you've been building up for years to harsh competition.
If you're a small business consider mediation not litigation to solve disputes.
Oftentimes, small businesses depend on local reputations. If these get damaged due to a dispute with a partner, customer or vender, it could be the downfall of your business if word gets around town. In order to avoid this scenario, consider settling disputes outside of court using third party mediators.
Find an experienced and knowledgeable attorney.
Most of the above tips require that you consult with an attorney. If you ever are sued, you'll wish you already had a good attorney lined up to take your case. If, on top of being sued or suing a party, you also have to research and find a good attorney, you'll only be adding stress to the situation. You'll need a good attorney for drafting contracts and agreements, so it's important to have one well before you'll need one for court. Be prepared, do your research early and find an attorney who you believe has your best interests in mind.
If you have questions or would like more information, send us a message.