One of the things that can spoil your plans for your business is a lawsuit. The time and expense of fighting legal battles detract from your profits, and your efforts to grow your company. There are a few rules you can follow to avoid this.
1. Act Professionally
Be careful what you say in private as well as on the job. Avoid any statements that might involve sexism, racism, or extreme political views. Do not make public announcements or produce content that could be considered slander or libel. Stay clear of associates who have a reputation for unscrupulous acts. Linking your name to theirs could involve you in their legal problems.
2. Avoid Conflicts of Interest
The surest way to lose trust and loyalty is through conflicts of interest. Any kind of public office or outside business holdings, such as being a shareholder in a supplier firm, might provide unfair opportunities for your own gain. Even if you have no intention of using them to your advantage, these types of situations could expose you to legal action.
3. Hire an Attorney
Entrepreneurs should seek out legal help from Carter West or similar law firms as soon as possible. Find attorneys that are passionate about helping small business protect themselves and grow. Creative, cost-effective, and experienced lawyers can help entrepreneurs navigate complex and demanding legal situations, as well as provide sound advice on securities, real estate, and other investment issues.
4. Separate Your Business and Personal Property
A sole proprietorship means your own possessions, such as a car or house, could be subject to legal claims against the company. The only way to protect assets is to commit them to a trust, or charter the business as a legal corporation with your state. Then you are essentially a shareholder rather than a full owner. However, both options involve their own taxes and regulations.
Essential policies might include property insurance, fleet insurance for vehicles, workers comp, and especially the right form of liability insurance. A customer who trips on the steps or a product that causes injury could land you in court. In the US, 13 percent of lawsuits involve product liability. It’s best to cover yourself as much as possible and call an attorney where insurance fails.
New business owners can best protect themselves by starting out on a proactive strategy including the right insurance, legal advice, and communication protocols. This will substantially reduce the chances of being hit with a costly lawsuit.