As a small business owner, it’s your primary responsibility to protect your business and reduce the risks of getting sued by a third party. Regardless of how busy you are in managing your company’s daily operations, you need to take some time to prevent potential business litigation that can affect its continuity for a long period. Although no company is immune to legal problems, there are plenty of ways to help ensure your business won’t be sued.
To legally protect your small business, below are a few ways to consider from the get-go:
- Pick The Right Business Structure
For most small business owners, operating as a sole proprietorship may not be the best business structure to legally safeguard your business from litigation. That being said, it’s important to choose the right form of business that can protect both your company and personal assets.
Typically, having the sole proprietorship structure may be unable to shield your personal assets against a lawsuit. This means if someone sues your small business and demands payment but your organization’s assets can’t afford it, that person may run after your personal savings and other assets to ensure payment.
Hence, if you don’t want to put your business and personal assets at risk, select the right structure such as forming a limited liability company (LLC). That way, you can have peace of mind knowing your small business is protected from legal issues.
- Research The Essential Business Laws
Another way of legally safeguarding your small business is to have some knowledge of the essential laws in the business industry. However, unless you’re a legal expert yourself, you may need the assistance of an experienced attorney like the ones in www.blakeandayaz.com and other reputable law firms to help you explain the following business laws:
- Intellectual Property: If your small business has intangible creations such as designs, inventions, logos, or marks that distinguish your company from other competitors in the market, be sure to have them registered to prevent others from using your intellectual property. By doing this, your brand will stay protected in the market.
- Employment And Labor: Hiring and managing employees can become a tricky job. If your employees feel they’re not treated fairly, it may end up in costly litigation against your business. To avoid this from happening, it’s best if you’re well aware of the different employment and labor laws applicable in your area. These can include laws pertaining to workplace safety, workers’ compensation, family and medical leave, civil rights, labor relations, and many more.
- Marketing And Advertising: Generally, false advertising or misrepresentation may end up in business litigation. As such, it’s essential to know the laws surrounding advertising and marketing. For example, you need to understand legal standards so you’ll not get into any trouble along the way.
- Use Written Agreements
When it comes to doing business with other people, trusting their words may not be the best thing to do. It can result in a potential dispute between you and the other party. When this happens, you may have to pay a considerable amount of money to settle the disputes and move forward.
Thus, to avoid dealing with costly disputes and litigations, make sure all the terms and conditions agreed by you and the other party are reduced in a written contract. That way, it’ll be much easier to resolve any problems by looking at the provisions of the contract.
- Insure Your Business
Your small business should purchase insurance to cover yourself and your company against liability. For example, if a client is injured as a result of a slip and fall accident, you should purchase liability insurance to cover this and avoid a case about premise liability from ruining your business. Also, if one of your clients accuses you of breaching a contract or making a mistake, you should get errors and omissions insurance to make sure your small business is legally protected.
Aside from buying insurance coverage, it can also be a good idea to incorporate liability protection clauses in your business contracts. An example of this is when an act of nature makes it impossible for you to comply with a contract, you should add in your official document that you’ll not become liable for any incomplete job due to this factor. To get this thing done properly, hiring a business attorney can be a good idea. They can help you incorporate legal clauses that can protect you and your small business against any legal problem.
Wrapping Up
Small business owners are responsible for protecting their business from all sorts of legal battles. Therefore, if you’re running one, keep these ways in mind so you can safeguard your business against anything that can take away your shot at a thriving future. Not only that, but you’ll also be in a stronger position to get rid of legal action when you know how to protect your business from start to finish. It is always better to hire a corporate lawyer when getting into a business.
