Being a business owner, you definitely have fulfilled several roles for your business. You may have been the customer representative, the developer, the salesperson, or even the payroll manager at some point.
Nonetheless, we all know it is best to leave it to a qualified and competent business attorney when it comes to legal matters.
One study by the Small Business Administration reported that around 36 to 53 percent of small businesses have to deal with lawsuits every year. Another study has shown that about 43 percent of small businesses had been threatened with a lawsuit.
Most often, business owners, particularly those owning small or medium-sized enterprises, do not put in mind so much the potential of any legal fallout. It is only when a lawsuit is staring right in the fact that business owners scramble to gain legal protection.
Do not be like the majority. Instead, give some time as well to protect the legal interest of your business. Otherwise, all the efforts you make in building your enterprise are all for nothing. Whether you agree or not, lawsuits can drain your business’s coffers.
1. Be Mindful Of the Image You Project
The image that your business projects are crucial. No wonder why owners of big corporations and their staff tend to avoid making any public announcement or doing any transaction that appears questionable. This includes making libelous or slanderous statements and partnering with sketchy businesses or individuals.
When venturing on another business opportunity, you should be mindful of any potential conflict of interest. Try to avoid any situation that could potentially damage your integrity and that of your business.
One good example of this is being chummy with the local town council. People might get the wrong idea that you are doing this to gain some form of protection for your business.
2. Hire a Competent Counsel
Sure, winging it is good, but when it comes to complex legalese, you should have a competent and trustworthy business attorney who can guide you every step of the way.
Most small and medium-sized businesses do not think about the legal aspect of the business until there is a lawsuit. After all, being sued is the last thing anyone wants to happen.
Even if you are starting your business, it is best to have a lawyer on standby. An attorney could help you with contracts or in case of delicts, and a personal injury attorney could give you advice on what action to take.
3. Incorporate Your Business
Most business owners own and operate their business in a sole proprietor capacity. It may seem like a good idea since it is much easier to start a sole proprietorship with less paperwork involved. However, this can be problematic in the long run.
If the company is being sued, being the business owner, your individual assets, such as your home, car, and bank accounts, are definitely answerable for any obligations.
One way to prevent this colossal stress from happening, limiting the chances of your personal assets being attached by the court of law, is to incorporate your business.
Aside from limiting your personal liability, an incorporated business has certain perks for building credit and raising capital. It is much easier too when you want to increase the number of business owners in the company.
The only downside of incorporation is that you must comply and submit certain papers and reports to government agencies for regulatory purposes.
4. Get Insured
Big or small your business is, you need to be covered with business insurance. Without any business insurance coverage, your business might have to pay out-of-pocket if, unfortunately, your business has to pay for damages or any legal claims.
One of the main insurance coverage your business has to have is workers’ compensation. Its purpose is to provide financial aid to workers who cannot work due to job-related illness or injury.
Another type of insurance businesses typically need is commercial liability insurance. This type of insurance answers the cost of a liability claim if customers injure themselves on your business property.
5. Protect Your Data
The world is becoming more and more digitized. Businesses are no exception. With most transactions and paperwork done using the computer and the internet, the importance of keeping data secure can never be overemphasized.
Ensure that your system has enough cybersecurity and data protection. This comes in handy, especially when some legal matters are brought up.
It is a huge responsibility to run a business. To increase your confidence and ensure security as your business grows, ensure the legal aspect is not left out.