3 Tips for Small Businesses to Avoid Lawsuits
I want to share some insight for small business owners based on my 14 years of practicing law. I began my career in commercial litigation and was exposed to various types of disputes that may arise in business. After working in this field for quite some time I discovered two main issues:
· Litigation is time consuming and expensive; and
· Many issues could have been avoided with proper planning and implementation.
As a result of my experience in commercial litigation, I developed my passion for helping business owners take a more preventative approach rather than the reactive approach that can cost business owners money and more importantly, relationships within the business community. This passion led me into transactional business law.
Whether you have been in business for some time or are just venturing out into the business world, it is always better to implement a plan and invest a small amount in your business to ensure that you are protected as you and your business grow. The more your business grows, the more there is at stake, so starting with a solid plan can prevent legal issues in the future. Below are my top three tips to make sure your business has a strong foundation:
1. Get Contracts in Place. Contracts are the best legal protection you have because our businesses are built on relationships. People are the key to your success, but if you do not clearly outline terms or responsibilities for each party in a contract, there could be a misunderstanding or dispute in the future. The contracts you use should be specific to your business. It is also important to:
· Use an attorney to create a custom contract to ensure that you are adequately protected. Attorneys can offer legal advice and tailor your contract based on the location of your business as well as the specific type of goods or services your business offers.
· Avoid using online templates as these contracts are not tailored to your specific business needs and may not provide adequate protection.
2. Stay on top of Employment Issues. Staying on top of employment issues can help you avoid several different problems in the future both within the day-to-day workings of your business and with governmental agencies. Some things to think about regarding employment issues includes:
· Classify your workers correctly to adhere to government guidelines and requirements;
· Get contracts in place for employees and independent contractors;
· Create policies and handbooks to limit your liability; and
· Be aware of compliance considerations, especially when operating a multi-location enterprise.
3. Remember Your Corporate Formalities. Remembering your corporate formalities can keep your liability shield in place so you can protect your personal assets should a lawsuit ever arise. It is important to note that different types of businesses will have different corporate formalities to fulfill. For example, an LLC will have less formalities than a corporation. Keeping up with your corporate formalities can also ease the process of any ownership changes. Two main corporate formalities that every business type should follow are:
· Keep your business and personal assets separate; and
· File your annual report properly.
These three tips are just the beginning when it comes to ensuring that your business is protected so it can flourish. Proper planning and legal advice can ease the stress of legal formalities so you can focus on doing what you love: running your business! It is important to contact a Florida licensed business attorney if you would like to discuss how to properly set up and protect your business. Wheeler Legal PLLC would love to assist your Brevard County, Florida business. Please contact us by calling (321) 209-5995 to set up a 30-minute Business Strategy Session Call.
Disclaimer: The information contained above is provided for general informational purposes only, and does not constitute legal advice, nor is it intended to create an attorney-client relationship. This firm aims to provide quality information, but we make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked to this post. Nothing provided herein should be used as a substitute for the advice of competent counsel.